£801m in cash was handled by the UK Post Office last month as more people are withdrawing cash to cope with the current cost of living crisis.
The Post Office highlighted in its report that the cash figure is 20% higher than what it was a year ago, with a total of £3.32bn cash deposited and withdrawn.
Chair of the Cash Action Group, Natalie Ceeney, believes this is ‘absolutely because of the cost of living crisis’, with the UK population ‘literally counting their pennies’ on how to deal with rising prices.
She told the BBC: “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’.
“Cash has been in decline for well over a decade, the pandemic accelerated this, but now it’s going back up, and that’s absolutely because of the cost of living crisis.”
COVID-19 was a catalyst for the rise of alternative online payments, as hand-to-hand cash was widely avoided due to virus spreading. Yet now, the Post Office’s report suggests people are becoming dependent on cash as a money saving tactic in favour of holding cash in banks or digital wallets.
With the highest amount of cash withdrawals since it began records five years ago, the Post Office also attributed its cash withdrawals from its 11,500 branches as a sign people are budgeting on a tighter day-to-day or week-to-week basis.
“We’re seeing more and more people increasingly reliant on cash as the tried and tested way to manage a budget,” commented Martin Kearsley, Banking Director at the Post Office.
“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.”
Kearsley went on to downplay the notion of an accelerating ‘cashless society’ due to the Post Office’s findings declaring the UK is “anything but a cashless society”.
Ceeney further highlighted this sentiment, remarking that ‘in reality, digital doesn’t work for everyone’.
With gas and electric bills expected to continue to soar throughout the autumn, cash withdrawals may only continue to rise and may hamper the growth of fintech payment firms in the UK for the next several months.