Cash is still king: Frugal shoppers on tight budgets return to real money to better manage their finances

Cash was used in 58 per cent of retail transactions last year, up from 55 per cent in 2010

The cost of the average shopping basket fell by £2.48 year-on-year to £10.45

Trade group said banks are levying 'unjustifiably' high charges on retailers for handling card payments

Consumers are increasingly using cash to pay for shopping in a bid to better manage their tight budgets, a study has found.

Cash was used in 58 per cent of retail transactions last year, up from 55 per cent in 2010.



But the cost of the average shopping basket also fell by £2.48 year-on-year to £10.45 as people kept strict controls on their purse strings, the British Retail Consortium (BRC) said.

Findings: Consumers are increasingly using cash to pay for shopping in a bid to better manage their tight budgets, a study has found

Debit cards accounted for 29 per cent of transactions, down from 34 per cent in 2010, while credit cards made up 11 per cent of transactions.

The BRC said its findings also showed banks are levying 'unjustifiably' high charges on retailers for handling card payments and it called for the Office of Fair Trading (OFT) to take action.

Accepting cash is around 24 times cheaper for retailers than taking credit card payments, the Cost of Payment Collection Survey found.

The average cost to a retailer of having a credit card payment processed was 36.2p and 9.6p for a debit card, compared with just 1.5p to have cash transported and banked.



Research: Accepting cash is around 24 times cheaper for retailers than taking credit card payments, researchers found

The study suggests people are using cash more because it 'helps them manage their money and prevents them spending money they haven’t got'.

Cash was also found to be the quickest way to pay, taking an average of 27 seconds, compared to 36 seconds for a card payment.

Household budgets have been badly hit by soaring bills at a time of sluggish wage growth.

Bank of England figures last month showed credit card borrowing fell by the biggest monthly amount since 2006 as people tried to pay down debt.

Tom Ironside, BRC director of business and regulation, said: 'Customers have less money.

