Bank of England Says Cash is ‘Hugely Relevant’ to Modern Life
Apr 4, 2024
The simplicity and reassurance of holding and using physical money lends it special relevance in uncertain times, and Bank of England data shows banknotes are in higher demand than ever, seeing a sharp increase in both number and value circulating since 2020.
The Bank of England Museum attributes spikes in the popularity of cash to ongoing turmoil caused by the pandemic and cost of living crisis. One in five people favour cash payments above any cashless options, and today ‘more people are using cash as a store of value for emergencies and to feel more in control of their money.’
For all that many people are using more digital payments, many people may be using cash as a means to manage their day-to-day spending—it’s much easier to keep track of your finances if you’re physically handing over cash in shops. People like to hold more money in times of uncertainty as well.
The value of notes in circulation has risen by nearly 16 percent since 2020, with total volume up almost 17 percent. Between 2020 and 2021 alone, value and volume rose by 14.1 and 14.6 percent respectively as people sought comfort in financial control.
The trend of declining cash payments has also seen a reverse, rising by seven percent to account for £6.4 billion of transactions in 2022. The Bank of England says ‘cash is still hugely relevant to the day-to-day lives of people across the country’, and non-profit Cash Access UK adds that cash users ‘increasingly include digitally savvy people in their 20s and 30s, and workers on zero-hour contracts who need to budget.’
The less visible a transaction is, the easier it is to overspend, and many younger people are choosing a mix of cash and cashless, or even cash-exclusive spending to take control of their budgets. Physical money also offers the reassurance of always having a way to pay for essentials, even when cashless payments are unavailable, perhaps due to electricity or internet service interruptions, or something as simple as a forgotten PIN.
For payment choice, for simplicity, for budgeting and for resilience, cash supports both economies and the individuals within them, all of which accounts for its continued relevance now and for the foreseeable future.