UK's ability to pay by cash 'on the verge of collapse', report warns The closures of bank branches and cash machines seen in recent years are "the tip of the iceberg", according to a major review.
The Bank of England is to launch a shake-up of the UK's cash system after a report found signs it was "falling apart" - and that moving to a cashless society would see millions left behind.
A major review has claimed the system is "on the verge of collapse", with experts warning the closures of bank branches and cash machines over recent years are "the tip of the iceberg".
Retailers have also been increasingly going cashless in order to reduce costs.
Cash use has declined sharply over the last decade, but the review found eight million adults would struggle to cope without it, with groups including the poor and those in rural communities adversely affected.
The report recommends that a "guarantee of cash access" is introduced in the UK, and says organisations that provide essential services should be obliged to allow customers to pay using coins and notes.
The Bank of England said it would work with the industry "to develop a new system for wholesale cash distribution that will support the UK in an environment of declining cash volumes".
Cash is now only used for three in every 10 transactions - down from six in 10 a decade ago.
Forecasts suggest this could fall as low as one in 10 transactions over the next 15 years.
The UK's cash infrastructure costs £5bn a year to run, and the report suggests that the shift towards digital payments has put "significant strain" on existing systems.
Natalie Ceeney, independent chairwoman of the Access to Cash Review, said: "There are worrying signs that our cash system is falling apart.
"ATM and bank branch closures are just the tip of the iceberg, underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines."
The review has been funded by the cash machine network Link, but was carried out independently.
Regulators, banks and the government were urged to act now on the report's findings.
Sarah John, the Bank of England's chief cashier, said: "We are committed to cash.
"Although its use is declining, many people, including vulnerable groups, still prefer to use cash.
"The action we are announcing today will help to support cash as a viable means of payment for those who want to use it."
John Glen, economic secretary to the Treasury, added: "We're working closely with regulators and the banking industry to ensure that people continue to have real choice over how they spend their money."
0 Comments