Notes and coins set to fall to just 21% of sales by 2026, raising questions for those who rely on the cash economy

Britain will move beyond “peak cash” this year, according to data gathered by the Guardian that suggests notes and coins are rapidly being supplanted as the favoured payment method, particularly in cities.

Debit cards are set to overtake cash as the most frequently used payment method in the UK later this year, according to UK Finance, which represents leading finance and banking firms.

The volume of cash removed from cash machines (ATMs) is falling fast, while other data shows customers are eschewing cash for cards – even for small purchases such as a coffee or a beer.



In 2006, 62% of all payments in the UK were made using cash; in 2016 the proportion had fallen to 40%. By 2026, it is predicted cash will be used for just 21%, according to figures from UK Finance.

ATM data show that in 2016, there were 2.7bn withdrawals from the country’s 70,000 cash machines – the lowest number of transactions since 2010. The total amount of money withdrawn at ATMs has fallen steeply in the last few years; in 2016, people withdrew more than £6bn less than they did in 2015.

Bank of England figures meanwhile show that while the volume of cash in the economy typically increases every year, it is now doing so at the slowest rate since 1972.

In the developed world, Sweden and Canada are at the vanguard of the recent move away from cash, as debit cards, credit cards, phone payment methods and apps and online transfers predominate.



Britain has well and truly embraced a cashless society because of its ease and convenience Mark Latham, director at Handepay

In the UK, even at cafes and pubs, where people buy smaller value items, card payments are taking over. The pub chain Wetherspoon reported that the proportion of cash payments has fallen by about five percentage points every year for the past four years, dropping from 78% of all purchases in 2012-13 to 60% in 2016-17.

As few as one in 10 customers pay in cash at cafes – and a few have jettisoned cash altogether.

Pret a Manger said that more than half of their customers now paid by card and that the proportion was growing; Nando’s said card usage increased 3.37% in the last financial year and now made up 71.3% of all payments at its restaurants.

Cash has also declined dramatically for transport payments. In 2017, train ticket payments were more than four times higher by card than by cash, according to data shared by the Rail Delivery Group, which represents train operators in the UK.

“Britain has well and truly embraced a cashless society because of its ease and convenience,” said Mark Latham, director at Handepay, a provider of card machines. “When [contactless payment] was first introduced in the UK in 2007, there was a lot of ambivalence, but adoption over the past few years has been rapid because of demand.”

Graham Mott, head of strategy at Link, the UK’s largest cash machine network, said that the number of cash machines in Britain was likely to fall, principally in urban centres.

But concerns have been raised for vulnerable groups who might be disproportionately affected by any reduction in the ability to obtain or pay through cash. According to UK Finance, more than half of people who rely predominantly on cash to the exclusion of other payment methods have a household incomes below £15,000.

“I’m really concerned about this move toward a mainly cashless way of doing things,” said Lady Tyler, who was chair of the House of Lords select committee on financial exclusion. “These changes might suit people who are very digitally competent, they might suit banks who can reduce their costs, [but] I really don’t think they are thinking about more vulnerable groups,” she said.

Lucy Malenczuk, a senior policy manager at Age UK, warned that cash was still an extremely important method of payment for some.

“I think that older people along with other commonly excluded groups, such as very low-income consumers are at risk of being disproportionately affected if cash disappeared from society.”

However, some working in cash-handling businesses are confident that a future remains for cash.

They point to the fact there are more bank notes in circulation, totalling a higher value, than ever before - though this measure includes cash lying dormant in bank vaults and ATMs, and as such is not a reflection of usage rates.



Notable slowdown Notable slowdown

Mark Trevor, commercial director at Vaultex, which handles one-third of the country’s cash, said while they could not provide figures, they are seeing less of a decline in cash use than other sources are reporting. “While industry figures do show a decline in cash use, the idea that we will all be going cashless has been greatly exaggerated.”