Cash-only spending has seen a surprise jump, hitting a four-year high due to consumers budgeting.
Figures from UK Finance have revealed that 1.5m adults mainly used cash in 2023, the first rise in cash spending since 2019.
In 2019, 2.1m used cash, followed by 1.2m in 2020, 1.1m in 2021 and 0.9m in 2022.
Simon Grewal, of Premier Crabbs Cross in Redditch, said: “I’m surprised. Our stats show a decline in cash use every year. I feel like we’re headed towards a cashless society, and that doesn’t surprise me. Although some retailers don’t agree, I think cashless makes things a lot easier for us – for example with wage bank transfers and in handling sales on the till. We tend to do everything with bank transfer, like paying suppliers too.”
UK Finance’s head of research Adrian Buckle said: “This is likely to be a reflection of the use of cash to manage a limited budget.”
However, the results show that the majority of young people paid for goods using smartphones or watches, with 72% of 18- to 24-year-olds regularly using their digital wallets to make contactless payments.
Meanwhile, more than a quarter (27%) of 45- to 54-year-olds used mobile contactless payments regularly, falling to just 8% among over 65s.
Buckle said: “Mobile contactless payments are growing fast and one-third of adults are now making these at least once a month, with scope for usage to increase further.”
Cash use dropped again last year to 12% of all payments, according to UK Finance, and 22 million consumers were primarily cashless.
The news comes following the Financial Conduct Authority’s move to protect access to cash, with Post Offices and ATMs legally required in communities considered to be lacking access to cash.
Treasury halts creation of 1p and 2p coins
It also follows news that new 1p and 2p coins will not be ordered this year, according to the Treasury. Officials have reportedly decided there are enough of these coins in circulation, while a declining use of cash is also a factor.
A Treasury spokesman stressed that copper coins were not being dropped completely. “We are not scrapping 1p or 2p coins,” he said.
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