Nationwide cites costs-of-living and local presence as driving cash withdrawals


A combination of macro and micro economic factors in the UK have led to a resurgence in usage of physical cash, at least for customers of Nationwide Building Society.

Data released this week from the building society revealed that 3.14 million cash withdrawals were made from its network of 1,200 ATMs in 2023, 4% more than the year prior, with an average withdrawal of around £105.

This average withdrawal amount is just 1% more than the year prior, but is 28% higher than the pre-pandemic period. This is an interesting change, as in many cases the COVID-19 outbreak and subsequent lockdowns heavily accelerated the shift away from physical cash and towards cashless payments.

“ATMs play a vital role in society, enabling people to easily access and manage their money flow,” said Otto Benz, Director of Payments at Nationwide Building Society.

“We now have the largest branch network in the UK, which allows us to support customers who want access to cash, whether from our ATMs or over the counter. 

“Unfortunately, the large banks have closed, and in some cases are still closing large numbers of branches, meaning far fewer free-to-use ATMs are available.”

Nationwide’s observations of UK cash usage are long-running, with the bank having reported this trend in January 2023. However, although the bank noted that total withdrawal amounts have increased since COVID, the overall number of withdrawals still remains less.

Total cash withdrawals in 2019 stood at 44.55 million with an average of 3.71 million per month, falling to 26.43 million and 2.20 million 2020 and then 25.45 million and 2.12 million in 2021, before rebounding to 30.21 million and 2.52 million in 2022.

Additionally, the group has also witnessed a 10% increase in the number of times its ATMs have been used for cash deposits between 2018 and 2023, with the average amount deposited increasing by 29% over the five year period to £277.

Nationwide has attributed this reverse trend in cash withdrawals and deposits to two factors- firstly, the costs-of-living crisis. Some consumers may find it easier to budget when paying with physical cash in hand as opposed to a card or transfer.

Secondly, the decline of many high-street banks has also been cited as a key reason, with Nationwide being ‘the last branch in town’ in many localities throughout the UK. It is certainly true that retail banking has faced some setbacks this year.

The past two months alone have seen Barclays and Lloyds announce more local branch closures, whilst Metro Bank cut over 650 jobs and initiated a review of its opening hours.

This situation has even prompted a political response. The Labour Party has unveiled a policy of creating ‘banking hubs’ across the UK to help consumers left in ‘banking deserts’ by local branch closures.

Commenting further on the trends observed by Nationwide, Benz remarked: “ATMs do more than just dispense cash – nearly half of transactions are from people paying money in, checking their balance or paying a household bill. 

“This goes to show this is far from the end for cash and we will continue to offer our customers the ability to access their money on their terms whether that be digitally or in branch.”