15.08.2022

People turning back to cash as prices rise

Access to services News post offices isolation Rural Vulnerability access to cash cost of living

The BBC report that people are going back to cash to keep tighter control on their spending as living costs soar, according to new research by the Post Office

Post offices handled £801m in personal cash withdrawals in July, the most since records began five years ago.

That's up more than 20% from a year earlier.

Natalie Ceeney, chair of the Cash Action Group, said it showed people are "literally counting the pennies" as they grapple with rising prices.

"It's absolutely because of the cost of living crisis," said Ms Ceeney, who chaired the government's independent Access to Cash review.

"People will be taking out cash and physically putting it into pots, saying 'this is what I have for bills, this is what I have for food, and this is what's left'."

In total, £3.32bn in cash was deposited and withdrawn at Post Office counters in July, £100m higher than in June.

Personal cash withdrawals, at £801m, were up almost 8% month-on-month and up more than 20% year-on-year.

It is the highest amount since records began five years ago, and only the second time that personal cash withdrawals have exceeded £800m. The last time was December 2021, and there's always an increase in withdrawals around that time of year, the Post Office said.

Martin Kearsley, banking director at the Post Office, said: "We're seeing more and more people increasingly reliant on cash as the tried and tested way to manage a budget.

"Whether that's for a staycation in the UK or if it's to help prepare for financial pressures expected in the autumn, cash access in every community is critical."

With more high street banks closing branches, Ms Ceeley said there's a need for post offices and shared banking services to allow people to get the cash that they need, especially for vulnerable or elderly people or those who don't have access to digital banking.

Full article:

The BBC - Cost of living: People turning back to cash as prices rise

The RSN supports access to cash remaining in rural areas and have published the below policy asks of Government through the Rural Town Centres and High Streets chapter of Revitalising Rural: Realising the Vision campaign:

Access to cash: the Payment Systems Regulator should follow-up its recent report on access to cash by monitoring the trend in rural areas. As legislation to support access to cash is developed, we strongly believe the Government must:

1. Act without delay to prevent further deterioration of cash infrastructure, introducing interim measures to protect cash access points at pre-pandemic levels and force LINK’s bank members to enable ATM deposit taking through the LINK scheme while longer-term regulation is developed.

2. Protect ATMs – as the only sustainable national infrastructure that can maintain free access to cash 24/7, re-introducing independent assessment of interchange fees.

3. Protect key schemes including LINK and the Post Office framework by making bank membership mandatory.

4. Include deposit-taking facilities in the definition of ‘reasonable access’ and ensure requirements reflect consumers’ lived experience as opposed to an arbitrary as-the-crow-flies measurement.

Bank branches: the code which banks follow before closing a branch needs strengthening, so that decisions can be challenged and reversed. Branch closures continue at pace and the self-implemented code is little more than a box-ticking exercise. Alongside this, protecting the Post Office network is also very important.