Many are turning to cash to help themselves budget as the cost-of-living crunch deepens. Louise Scott reports
People are increasingly using cash in order to tighten control of their spending as food and energy prices soar, new research by the Post Office suggests. Post offices handled a record £801 million in personal cash withdrawals in July, marking an increase of nearly 8% month on month.
The increase could be due to people taking more staycations in the UK as well as relying on cash more to manage their budgets on a weekly or even daily basis, according to the Post Office. In total, a record £3.32 billion in cash deposits and withdrawals was handled at the Post Office’s 11,500 branches across the UK.
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know
Personal cash deposits totalled £1.35 billion, up 2% month on month, while business cash deposits totalled £1.13 billion, up by 1.9% month on month.
The Post Office has attributed the extra volume of withdrawals to more people turning to cash to help manage their budgets.
“Our latest figures clearly show that Britain is anything but a cashless society," 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. “Postmasters handling over £3.3 billion in a single month demonstrates just how vital being able to deposit and withdraw cash securely and conveniently is for millions of people.”
Natalie Ceeney, from the Cash Action Group, told ITV News that the latest figures show we do not live in a cashless society, as many experts had previously said.
"We have spent the last decade talking about the death of cash and yet there are still ten million people in Britain who are dependent on cash." she said.
"For the first time in over a decade we have started to see that number rise. And we know that the main reason is that cash is so good for budgeting.
"If you have just got £30 for the week, having it in cash means you can put money aside for food, you can put money aside for bills, see if you have got anything left and just avoid going overdrawn."
She added that the Post Office research showed a significant number of people are now using bank branches or post offices to withdraw amounts to the penny, something an ATM does not allow for.
Natalie Ceeney explains why cash is so good for budgeting when incomes are squeezed
The comments come as charities warn that many lower-income households could have to choose between eating and heating their homes in the colder months of the year, with a recession predicted in winter.Household budgets are being squeezed as Russia's invasion of Ukraine has helped raise the price of food, with companies facing increased costs for things like fuel, wages and ingredients.
UK inflation - the rate at which prices rise - hit 9.4% in June, the highest level for more than 40 years.
Previous research among ATM users - which showed around two in five people are using cash to help themselves budget -further shows that many consumers are wary of using credit cards when needing to tightly monitor their finances.
Hundreds of thousands of Cardtronics ATM users were asked in June whether they are using cash to help them budget as bills crept up. Some 39.2% of those who responded confirmed that they were.