Cash Returns Surprisingly in the Digital Age of the UK

The yearly report on payment patterns published by UK Finance exposes an interesting contradiction for the country. On one side, following a fleeting comeback in 2022, cash payments started their declining spiral once more. Conversely, the proportion of people who would rather feel actual money in their pockets has surged astonishingly 66%.

From 900,000 in 2022 to a stunning 1.5 million in 2023—the largest number since pre-pandemic times—the ranks of these “cash enthusiasts” expanded. Financial analysts have taken note of this leap and hypothesize that people returning to the real security of cash for better budget control may be motivated by the cost of living crisis.

Social media has also had a role; the “cash stuffing” habit is gathering popularity. Rebranded for the Instagram age, this traditional budgeting approach divides funds into labeled envelopes for various expenses. Cash-strapped homes trying to control their spending will find resonance in this practical method.

Watching this cash comeback, UK Finance is wondering whether it is the beginning of a new trend or perhaps a “statistical blip” in the data. Fascinatingly, although those with lower incomes are more likely to prefer cash, the cohort comprises persons from various economic backgrounds and age ranges. This taste seems to be more influenced by personality than by situation.

These cash fans are not exactly anti-bank or privacy zealots, though. Most employ digital means of regular bill payment and own debit or credit cards. For daily use, they just want the tactile character of currency.

At the other end of the scale, the number of people living “largely cashless ives” – using cash seldoml or hardly at all – has also grown, rising to 22.1 million in 2023.

This comeback of cash use gives the changing scene of personal finance an interesting aspect while the UK keeps on its path of digital payment. There seems to be room for the lowly banknote and coin in our ever computerized environment.