The UK government may have to step in and fund cash machines if rates of cash usage continue to decline, according to a new report.

The Future of Finance report warned that people who rely on cash could struggle to access it in future if rates of cash usage continue to decline.

“It may be necessary for the state to support the cash economy as a public good, as without this, the incentives for many actors will be to reduce the use cash,” the report said.

The report, released last week, points to Sweden as an example of how things can go wrong. Cash usage stood at just 13% in 2018 but even by 2016 it “became increasingly difficult to maintain cash services in sparsely-populated areas,” the report warned.

The warning comes on top of the UK Cash Review earlier this year, which concluded that Britain’s cash distribution network is dangerously close to collapse as rates of usage decline.

READ MORE: 'Dramatic collapse' of cash in UK could exclude millions of elderly, poor and rural people

The number of free cash machines in the UK declined by 1,700 in the first three months of the year. ATMs and the cash distribution network has high fixed costs — it’s not easy to cut the cost of securely transporting cash to and from ATMs. Operators — banks and other private companies — have to either charge more for withdrawals to make it viable or simply shut down the machines.

Debit card transactions overtook cash payments for the first time in 2017, the Future of Finance report said, and just 30% of transactions in the UK currently use cash. ATM withdrawals fell by 6% last year and have already fallen by 9% so far this year.

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“Authorities will have to find new ways of maintaining access to and the distribution of cash if the rate of decline accelerates,” the Future of Finance report warned.

Earlier this year, Chancellor Philip Hammond pledged to maintain access to cash for all UK citizens across Britain. He set up the Joint Authorities Cash Strategy Group to ensure cash survives.

The Future of Finance report is the product of a year-long review commissioned by the Bank of England. The report was published last Thursday evening.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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