Cash has a place in our digital age
New rules are vital to protect those who use notes and coins in their day-to-day lives.
18th August 2023 10:21
by Myron Jobson from interactive investor
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Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “While Britons are increasingly turning their backs on cash and moving to digital payments, it is still an essential payment method for many people and businesses.
“But finding an ATM to withdraw cash is a palaver for many as bank branches have been dropping like flies amid the shift to online and mobile banking, while cashpoints are few and far between in some areas. This can be infuriating for those dependent on cash, forcing many to travel unreasonable distances to pay in or take out cash.
“Most of us rely on the plastic and our smartphones to make payments, but many individuals, particularly those in rural or under-served areas, rely on cash for their daily transactions. Limiting access to cash could exclude these individuals from participating in the economy, making it difficult for them to buy necessities, pay bills, or conduct basic financial activities.
“Not everyone has access to digital payment systems or the necessary technology. Restricting access to cash could disproportionately affect lower-income households and people who don’t have or can’t use the internet or those who may not be comfortable or familiar with digital transactions.
“Having access to cash is also important when it comes to budgeting amid the cost-of-living crisis. Using physical cash to budget offers a tangible and visual representation of your spending limit, making it easier to track and control your expenses. This could reduce the risk of overspending since you're limited to the amount you withdraw. It's like a reality check, a tangible reminder of your financial boundaries.
“There is also something to be said about the value of physical cash when it comes to teaching young children about money to help them develop good financial habits from an early age. Teaching young children about the value of savings isn’t quite the same if they aren’t able to see or touch the money they’ve been given.
“We live in the digital age, but cash shouldn’t be left behind. It's been here longer than we have and there are good reasons for it to stick around. A mix of payment options, including cash, ensures that consumers have a range of choices and services available to them.”
Key points:
- Government protects cash access services, free of charges, across the UK
- New minimum expectation for cash-users set out by City Minister
- Vulnerable cash users protected by Financial Conduct Authority (FCA)
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