Will the UK become a cashless society? (2024)

The use of cash has fallen dramatically in recent years, as card and mobile payments have risen in popularity – only 14% of all payments in 2022 were made using physical money.

This shift in behaviour has partly been driven by the pandemic, which saw more people turn to online shopping and some businesses stop accepting cash.

“The UK has witnessed a staggering decline in cash usage over the past decade,” says Finn Wheatley, Financial Expert and Risk Analyst at The Small Business Blog.

“Cash payments plummeted... between 2010 and 2020 alone, according to UK Finance data. The Covid-19 pandemic only accelerated this trend, with even traditionally cash-reliant demographics like the over-50s doubling their contactless payment rates during lockdowns.”

But while moving to a cashless society has several benefits that will accelerate its adoption, and there are legitimate concerns over the role cash will have to play as its use dwindles, there’s no sign that cash is going to disappear completely.

As the Bank of England says says in its analysis of the outlook for cash: “While the future demand for cash is uncertain, it is unlikely that [it] will die out any time soon.”

Going cashless does make things safer

While some might like the simplicity and ‘feel’ of using hard cash, there are several benefits to using your card, especially when it comes to convenience... and even reducing germs.

“With a tap of your card or a click on your smartphone, transactions are swift and seamless. It's also more hygienic - no more handling grimy notes or coins,” says Will Fenton, Founder of financial comparison website and educational hub sterlingsavvy.co.uk.

Crime, including theft and robbery, is also generally reduced in a cashless society. While cash is essentially untraceable, digital payments are easier to track and credit or debit cards can quickly be cancelled if stolen.

“A digital payment system allows for greater economic transparency, which can help curb illicit activities like tax evasion and money laundering,” adds Wheatley.

The use of biometrics, including fingerprints and facial recognition on your phone, makes cashless payments more secure, while businesses save time by not needing to store cash or deposit it at the bank.

For keen travellers, paying by card rather than carrying around a wallet full of foreign currency is not only safer, but also much easier to organise and manage – and you can take advantage of the latest exchange rates too.

‘Cash doesn’t crash’

One of the biggest concerns about going cashless is that those living in rural areas with limited broadband and mobile phone coverage could be left behind, as could those who are less comfortable managing their money online.

Research from Age UK shows that while 58% of over 65s mainly use a digital banking service to manage their main account, 27% prefer to do so in-branch or other physical locations, such as a Post Office.

Cashless spending can also be harder to control, as Wheatley explains: “Some individuals, particularly those with low incomes, find the tangible nature of cash helpful for budgeting – a purely digital system could make overspending easier.

“Additionally, as cash demand dwindles, the availability of ATMs is likely to diminish, compounding issues for the cash-reliant.”

Then there’s the problem of technical issues and IT glitches, or even cyber-attacks, that can unexpectedly grind everything to a halt and leave shoppers unable to make payments.

Martin Quinn, Campaign Director at Payment Choice Alliance, a body campaigning for the continued ability to use cash more widely, says: “The recent IT glitches affecting Sainsbury’s, Tesco and Greggs just show how susceptible the whole payment system is to [failure].

“If these retailers were more equipped for cash payments they could trade effectively, even with an IT issue, because cash doesn’t crash.”

Another potential issue is privacy. When you pay with cash, you remain anonymous. But when you pay digitally, you leave an online footprint, which can be monitored by financial institutions and other businesses.

While access to this footprint is protected, it still creates a record with the relevant retailer and is more complicated to manage than simply using cash.

Which is more secure, using cash or card?

The answer to the question of security isn’t clear-cut. Although digital payments offer protection against physical theft, in a cashless society you’re more exposed to scammers, hackers and the potential draining of your bank account.

James Bore, Chartered Security Professional and Managing Director at Bores Group, told Saga Money:

"Each option [cash and cashless] is more secure against different attacks – cash is much more protected against any form of online fraud, while electronic money is safer from physical theft (though not completely safe).

“Which is more – or less – secure really depends on an individual’s situation at the time – £50 in your wallet is less secure than the cards in it if someone steals your wallet. But the same amount sitting on your desk at home isn’t going to be affected by an online shopping scam.

“Cashless does provide more options for security, such as biometrics, location matching and similar, but these are only necessary because it is open to the relevant attacks,” adds Bore.

“With cash, all someone can do is physically steal it, whereas cashless has a slew of other potential ways to be taken from a victim without ever being physically near them, and so needs better protections for these scenarios.”

How are other societies going cashless?

So far, Norway, Sweden and Finland have been leading the way for cashless payments. Most of Sweden’s bank branches have now stopped handling cash, while many shops and restaurants will only accept card and mobile payments.

Wheatley says: “Sweden is often praised as a model for going cashless, though it hasn’t eliminated cash fully yet. Its transition was helped by nationwide efforts to build digital infrastructure and improve digital literacy, particularly for seniors.

“Creating similar UK programs for the over-50s could ease adoption.”

Yet despite being positioned at the forefront of building a cashless society, the Swedish central bank governor has since called for legislation to ensure that people still have the option of paying in cash if they want to and that no one is excluded.

Is cash going to disappear in the UK?

The introduction of banking hubs– being opened around the country by major high street banks in association with the Post Office – could provide a welcome solution for those who still want to manage their money in a branch, as well as support people who are facing bank branch closures in their area.

On top of this, the Financial Conduct Authority (FCA) recently proposed new rules to ensure that people will still have access to cash if they need it by mandating that banks must continue to offer accessible cashpoints.

This has been partly enshrined in law by the UK Government in 2023, with rules stating that cash must be available to withdraw for free.

It has also given the FCA powers to ensure that most people will have access to a free cash machine within a mile of their home, and three miles for those living in rural areas.

“Whilst the growing choice and convenience of digital payments is great, cash has an important and continuing role to play,” said Economic Secretary to the Treasury, Andrew Griffith, when announcing the new rules.

“That’s why we are taking action to protect access to cash in law and laying out that this means fee-free withdrawals and the availability of cash facilities within a reasonable distance.

“People shouldn’t have to trek for hours to withdraw a tenner to put in someone’s birthday card – nor should businesses have to travel large distances to deposit cash takings.

“These are measures which benefit everyone who uses cash but particularly people living in rural areas, the elderly and those with disabilities.”

What can you do if you’re worried about going cashless?

If you’re concerned about going cashless– whether you’re worried about the security risks, or you don’t feel confident enough to manage your money online– there is support available to make things a little easier.

Caroline Abrahams, Charity Director at Age UK, says: "Digital technology has much to offer and at Age UK we always encourage older people to go online if they want to and they can, but there should always be an offline way of accessing services.

“In the meantime, many of our local Age UKs provide training courses for those who want to manage their money better and learn about going online.”

You can call Age UK's Advice Line on 0800 678 1602 to ask about the opportunities in your nearest Age UK branch and to find out about any other local training opportunities – or you can visit the Age UK website.

If you’re worried about getting online at all, let alone banking digitally, Abrahams highlights there is easy help available: “The Online Centres Network [coordinated by the Good Things Foundation] has thousands of ‘Digital Inclusion Hubs’ across the UK.

“These provide digital skills advice and support, as well as access to public computers and the internet.”

You could also ask your local library about computer training opportunities or a family member or friend if they could help you get set up with online banking and digital payments.

Some banks offer digital content to help you stay safe online when paying digitally– and you don’t have to bank with them to get access.

Key takeaways

• While cash use is dropping, there’s no sign it’s going to die out completely in the UK.
• Recent laws will help to keep cashpoints open and accessible.
• Going cashless does have multiple benefits, especially around being able to more easily pay for things and recover money in the event of theft.
• However, cash remains a useful tool in the event of cyberattacks or online outages.
• If you’re worried about moving to digital banking, there are many courses to help or resources online that can help you take the first steps.