The pandemic was supposed to usher in a cashless society, and many businesses have gone card-only – but Britons are finding it hard to let go of notes and coins.
Cash is enjoying an unexpected comeback, reflecting the fact that, for many people, physical money remains the ultimate budgeting tool in tricky financial times.
New data from Nationwide, Britain’s biggest building society, revealed that cash usage had risen for the third year in a row.
It saw nearly 33m withdrawals made from its ATMs last year, a 4.6% increase on 2023 and up almost 29% on 2021’s figure of 25.4m.
The biggest increases in cash withdrawals were recorded in Chiswick in west London, and the town of Shotton in Flintshire in Wales, the building society said.
Nationwide said cash usage was “thriving”, adding that this recent “surge” coincided with many consumers increasingly relying on notes and coins to help them manage their budgets at a time when the cost of living remains high. However, ATM usage has also risen owing to bank branch closures, it said.
Last summer, the banking body UK Finance said there had been a surprise jump in the number of people who mainly used notes and coins for their daily spending, despite the UK moving closer to becoming a cashless society.
The cost of living crisis, which escalated sharply in 2022 when household bills spiked, led to growing interest in budgeting trends such as “cash stuffing” – also known as the cash envelope system – which involves dividing money up into envelopes labelled for different categories such as groceries, bills and a rainy day.
Changes in spending habits were dramatically accelerated by the pandemic, with the number of payments made using notes and coins plummeting by 35% in 2020. At that time, more shops, restaurants and other businesses started to refuse to take cash.
Prior to 2022, the number of cash withdrawals at Nationwide had been steadily declining from its 2014 peak. But the new figures show that withdrawals have ratcheted up for the third year in a row since the pandemic.
The average amount of cash taken out at a time from Nationwide ATMs was £112 last year, and the busiest time of the year for cash withdrawals was the week before Christmas when £97.9m was withdrawn. “This is the highest amount dispensed in a week since pre-Covid,” said the building society.
Withdrawals by non-Nationwide customers were up 16%, which it said highlighted the impact of the bank branch and ATM closures that have made it harder for communities up and down the country to access cash and do their banking.
