'We must avoid sleepwalking into situation where cash is no longer accepted' MPs warn

MPs says there may come a time in the future when it becomes necessary for the Treasury to mandate cash acceptance if those who rely on physical cash are not adequately supported.

Cash usage is on the decline but there is no existing legislation that forces businesses to take physical money.

Campaigners have long argued that cash still has a place on the high street, particularly for the elderly, vulnerable and those fleeing domestic abuse.

A report by the Treasury Committee published today said the Government's lack of action on the issue will lead to a two-tier society.

It found that the vulnerable are paying a premium on essential goods and services as the number of places that accept cash falls.

'People who are already at increased risk of poverty will, therefore, face a poverty premium if cash is not widely accepted by businesses and other organisations,' the report said.

Last month, This is Money revealed the constituencies with the biggest fall in cash usage in the past five years.

When quizzed by the Committee in January, the economic secretary to the Treasury, Emma Reynolds, said there were 'no plans to regulate businesses to compel them to accept cash, big or small.'

She said she didn't think 'we're anywhere near having a cashless society,' but Link's figures suggest there may be some areas that will be.

Now the Treasury Committee says 'there may come a time in the future when it becomes necessary for the Treasury to mandate cash acceptance if those who rely on physical cash are not adequately supported.'

Chair of the Treasury Select Committee, Dame Meg Hillier MP added: 'The Government is in the dark on how widely cash is being accepted and that is completely unsustainable. We are at risk of a two-tier society where the most vulnerable bear the brunt and this needs to be a wakeup call.

'As a society, we must avoid sleepwalking into a situation where cash is no longer widely accepted. This is the beginning, not the end, of our scrutiny of this issue. The Government needs to take this seriously.'

Figures from the Link network of ATMs show that, despite efforts to maintain access to cash, the total value of withdrawals has dropped significantly in every area of the country since 2020.

In 2019, £116 billion was withdrawn from ATMs compared to £80 billion in 2024, a 31 per cent fall, meaning consumers are withdrawing £100 million less cash every day compared to before the pandemic.

The total transaction numbers, including balance enquiries, also dropped significantly, from 1.73 billion in 2019 to 921 million in 2024, although the average withdrawal value increased from £65 to £85.

The figures will do little to quell concerns that the country is hurtling towards an entirely cashless society, as people increasingly use contactless payments and mobile payments.

John Howells, chief executive of Link, said: 'This timely report is further evidence that cash continues to be absolutely critical.

'Critical for the millions of people who rely on it day in, day out, and critical for national security and resilience.

'That's why supporting access to cash remains vital. But the report is also proof positive that we need to focus on the digital future alongside protecting access to cash, and make sure we don't leave cash users behind as new technology develops.'

The most recent statistics show that cash represented 12 per cent of all payments, down from around 25 per cent five years ago and 60 per cent in 2008.

Contactless reigns supreme, with 43 per cent of adults regularly using it, followed by 22 per cent who prefer mobile phone payments, according to Link's analysis.

Every single constituency has seen a fall in cash withdrawals of more than 20 per cent, with the average area withdrawing £1 million less every week.

The figures also reveal regional differences, with more deprived areas seeing smaller falls while more affluent ones have seen a huge decline.

Some people say using cash gives them a physical reminder of how much they have spent, and helps them keep on top of their budget.

The fastest move away from cash has been in city centres and more affluent areas.

The Bristol Central constituency topped the list with a decline in transactions of slightly over 67 per cent over five years, while the value of cash withdrawals fell 51 per cent.

Residents are now taking out £105 million less per year than in 2019, or £290,000 per day.

It was followed by Edinburgh North & Leith, which saw a 67 per cent fall in transaction volumes and a 52 per cent fall in their value, and Westminster, which saw transactions plummet 66 per cent and their value 50 per cent.

Link says falling transactions act as a better measure because if there are fewer transactions, cash machines are more likely to close or switch to pay to use.

The top 50 constituencies where people have moved away from cash all saw falls of more than 50 per cent. These were dominated by English and Scottish constituencies.

Northern Ireland is the most cash-heavy area of the UK with the average adult withdrawing £2,274 in 2024, higher than the national average of £1,424.

Areas with higher levels of deprivation and digital exclusion are moving away from cash more slowly, said Link.

Weald of Kent saw the slowest move away from cash with transactions down 22 per cent over five years, while their value fell just 4 per cent.

It was followed by Leicester East, where transactions fell 27 per cent and the value dropped 7 per cent.

The slower decline in some areas suggests that cash is still critical to many communities, with £400,000 withdrawn from Link ATMs in each constituency every month last year.