[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries

UK to be ‘virtually cashless’ within a decade

The UK government should take steps to protect access to bank notes and coins to avoid the country sleepwalking into a cashless society within a decade, experts have urged today.

Growing digital payments ©iStock
Growing digital payments ©iStock

The Access to Cash Review warned that cash use has fallen faster than it expected over the last 12 months. It predicted last March that the UK would be “virtually cashless” by 2035.

One-quarter of all ATMs now charge customers to make withdrawals – up from 7% a year ago – while an increasing number of businesses are shunning cash due to banking costs.

This has led to a growing number of people being unable to access services, with nearly two million UK citizens thought to have no bank account

Data from UK Finance shows that six in 10 transactions were made in cash a decade ago, but the trade association expects this to hit fewer than one in ten by 2030.

“The UK is fast becoming a cashless society without knowing what this really means for consumers or for the economy," said the Access to Cash Review's independent chair Natalie Ceeney.

"Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk."

The Access to Cash Review also revealed today that unprofitable services such as charging ATMs saw consumer charges increase by £29m in 2019 alone.

It called on chancellor Rishi Sunak to put an obligation on banks to provide suitable cash access, and to introduce legislation that allows customers cashback without a purchase.

However, analytics firm GlobalData said that the UK is well placed for the move to digital, highlighting how the country is second only to China for e-commerce as a percentage of GDP.

“The British have become very comfortable with taking out their phone or card to pay for even the most mundane daily purchases," said GlobalData payments analyst Vlad Totia.

"At this rate, the UK should transition at the very least to a predominantly cashless society by the mid-2020s.

“All of these developments point towards one question: what is the point of cash anymore?

"While it can still have its uses, physical money costs a lot to store, transfer and produce. Most coins produced are less valuable than the material used to make them.”

Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession