Are we heading towards a cashless society?

20 November 2020

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You may have seen the signs popping up in shops and cafés: ‘contactless only’ or ‘no cash payments here’. As the coronavirus pandemic continues, many retailers have reportedly begun asking customers to use contactless payments instead of cash, due to worries over hygiene. And it seems that lots of us feel the same: our research report, An Exploration of Worth, reveals that 51% of UK adults surveyed are much less likely to use cash because of COVID-19.

But is it all down to the pandemic, or were our attitudes to cash shifting anyway? According to a 2019 report by Sweden’s central bank Riksbank, cash use has been in constant decline in the country for years, while the amount of cash in circulation has halved since 2007.

Is Britain moving towards a cashless society too?

Cash is no longer king

During the first six months of the pandemic, the number of cash withdrawals plunged – and according to LINK, the UK’s main cash machine network, they were still just over a third lower this October than they were at the same time last year.

The findings of our research report reveal that the average amount of cash currently carried by UK adults is just over £36 – but many people we asked were found to carry much less. In fact, a quarter said they had less than £5 in their pockets – perhaps this is unsurprising since 43% of the people we asked agreed that visiting an ATM to withdraw cash is ‘annoying’.

Some of us are concerned about cleanliness too, with almost a third of those surveyed worrying about hygiene when it comes to carrying physical money.

The older we are, the more important we are likely to consider cash

Our research report shows that younger generations seem less likely to consider cash important – 43% of 18 to 34 year olds think that you shouldn’t need to carry it these days. Just 16% of over 55s feel the same, and many of this age group (41%) worry if they don’t have cash on them.

This could be a reflection of the fact that younger people have grown up in a world where you can pay for things with your mobile phone or the tap of a card, whereas older people could more likely be accustomed to handling physical money. More than half of people (56%) across all age groups surveyed agree, however, that being able to manage your finances digitally is worthwhile.

There’s still a place for cash

But it’s not time to throw our wallets away just yet. Despite all this, more than half of UK adults surveyed think that using cash helps them appreciate the real value of money. It also helps some of us budget better too: just under one in three people say that physical money helps them to budget and to manage their spending more effectively.

Our research found little difference in attitudes across the country, with people in urban and rural areas similarly likely to agree that there are still lots of places that don’t accept card payments where they live.

And although cash withdrawals fell during the first lockdown, the Post Office’s new Cash Tracker reported that number of personal cash withdrawals rose 7.1% between August and September this year. Cash deposits were also 7.7% higher in September 2020 than they were in September 2019 – suggesting that people continue to rely on being able to access cash.

Our Head of Strategy Amanda Le Brocq added:

‘Carrying cash is something that a significant minority of us feel is worthwhile regardless. So, while our research demonstrates that many are less likely to use cash as a result of COVID-19, we may see the way we use cash change once again as society adapts to life in a pandemic.’

Download our 2020 report

Capturing the nation’s attitudes, behaviours and opinions towards our financial and working lives, An Exploration of Worth 2020 looks at what people consider most worthwhile – and raises interesting questions about their future priorities.

Download (pdf)

The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.