2022: The Year That Many Brits Learnt to Love Cash Again

Small slivers of hope in the Global War on Cash.

However it may seem, the title of this article does not include a typo. It mentions the year 2022, not 2023, for the simple reason that the publication of data on payment habits in the UK has roughly a one-year lag. As such, it wasn’t until late 2023 that it became apparent that the use of cash had rebounded in 2022, for the first time in ten years.

This is potentially an important trend reversal. Until recently it seemed that the British public, with a little helpful nudging from the government, high street banks and retailers, payment card companies, fintech firms and tech giants, was intent on abandoning cash as quickly as possible. A decade ago, around 60% of payments in the UK were made using cash; by 2021, with the COVID-19 pandemic raging, e-commerce booming and the contactless revolution in full swing, that figure had slumped to 15%. As in many other countries, the amount of cash in circulation did increase during this time, but this was a sign of hoarding, not of increased payments.

At the beginning of this year, Mastercard, a company that has singled out cash as its number one enemy and whose former CEO (and now World Bank Managing Director) Ajay Banga described physical money as “public enemy number one”, unveiled the findings of a survey it had commissioned into payment trends in the UK. Those findings, the company said, pointed to a further decrease in cash usage in the UK, which aligned perfectly with the company’s broader goals, exemplified by its current slogan: “World Beyond Cash”.

But then something rather unexpected happened (though we did kind of call it in August 2022): cash began staging a come back. In September this year, a report on payment trends by UK Finance, the country’s largest bank lobbying group, included a striking finding: cash payments had risen in 2022, for the first time in a decade. The number of cash payments had risen by 7%, the report noted, adding that surging inflation had prompted many people to turn back to cash or use it more often than before to help them manage their budgets.

This trend was further confirmed earlier this month (December 2023), when the British Retail Consortium (BRC) released the findings of its annual payments survey, which covers 2022. Like UK Finance, the BRC survey found that cash use had increased. From the Daily Telegraph:

Coins and banknotes accounted for nearly a fifth of transactions in 2022, according to the British Retail Consortium (BRC)’s annual Payments Survey.

Its report said: “This year’s Payments Survey shows an increase in cash usage for the first time in a decade, up from 15pc (in 2021) to just under 19pc of transactions (in 2022).

“Faced with rising living costs, cash was a useful tool for some people to manage their finances and track their day-to-day spending.”

The increase also reflects a natural return to cash following the move to contactless during the pandemic, the report said.

It is the first time since the BRC’s reports started in 2013 that cash usage has increased year-on-year.

Th BRC report tries to make light of this trend reversal, describing the use of cash in shops as still “fairly minimal,” adding that it reflects a “natural return” to cash following the huge shift toward contactless during the pandemic. There may well be some truth to this and one should be wary of reading too much into this potentially short-lived trend reversal. Card payments are still the number payment choice for UK citizens and it is quite possible that this rebound in cash use is merely a dead cat bounce (apologies to cat lovers).

But it is also worth bearing in mind that this is the UK’s largest retail lobbying group doing the talking here. The companies it represents, including large retailers, big banks, tech firms and payment companies like Visa and Mastercard, have a clear bias toward non-cash payments. For example, retailers and banks prefer people to use contactless payments as much as possible because: a) they are quicker to process, which means more sales per hour and more fees for the banks; and b) people tend to spend their money in a more carefree manner, which also means more sales for the retailers and more commissions and fees for the banks.

This was already known when contactless cards began making their appearance almost two decades ago, as a 2006 Financial Times article makes clear:

Mr Williams, [controller at The Bailey Co, parent company of Arby’s, a fast food restaurant chain based in the US], has found that customers spend about 50 per cent more when they use a contactless card than when they pay for their food with cash: “I think it is psychological: because customers are not pulling cash out of their wallet, they spend more.” Arby’s has also made productivity gains with less time being spent on counting money and taking it to the bank, Mr Williams says.

Another benefit to retailers is that cards allow them to capture data about their customers from small transactions.

“If contactless cards offer merchants better information on their customers, that could prove to be valuable,” says Mr Uzureau.

These are all major perks for retail businesses, banks and payment processing companies like Visa and Mastercard, but can be major shortcomings for individual consumers, particularly in times of hardship such as now.  As inflation has surged in the UK, more and more people have struggled to make ends meet, and many are turning to cash for relief. It is an example of how one broadly negative trend — the gradual pauperisation of large swathes of the population through austerity and inflation — can give rise to a broadly positive trend: the rediscovery of the benefits of cash.

As in the US, tightening household budgets have triggered a surge in what has become known as “cash stuffing.” As Forbes reported in August, this is nothing more than “a new name for the time-honoured, simple but effective budgeting method known as the ‘envelope system’ or ‘envelope budgeting””:

Cash stuffing involves taking your spending money, converting it to cash and stuffing it into envelopes marked with spending categories like rent, bills, groceries and gas.

You determine how much money you want to spend in each category on a weekly or monthly basis. Then, you put that much cash in each envelope and commit to only spending what’s in your envelopes.

While you can use a spreadsheet or a budgeting app to do this, many people find using physical cash and envelopes to visualize their spending to be more effective. Money in a bank account can seem more abstract, and you might not be able to keep track of how much you have left to spend at all times. If you go to grab cash out of your groceries envelope and see you have $40 left, you know exactly how much you can spend at the supermarket without going over budget.

On December 14, the British tabloid The Sun on Sunday ran a feature on how two mothers had saved hundreds of pounds in one month by switching from contactless to cash. One of the mothers realised that if she continued the practice she would be more than £5,512 better off over the course of the year. While this may be anecdotal, a survey by the consumer affairs magazine Which? found that 52% of respondents believe that using cash helps them to keep better track of their expenses. One in five of those who don’t use cash said they will start if inflation continues to rise.

“ When you pay with coins and notes it feels more like you are spending money,” clinical psychologist Dr Marianne Trent told the Sun on Sunday. “In many ways it doesn’t feel as real if you are using plastic and it’s easy to tap away without realising just how much is coming out of your account.”

The Post Office has been offering intermediary cash services for banks in recent years and since the summer of 2022 has seen a sustained surge in the amount of cash being deposited and withdrawn at its branches. In November this year, personal cash withdrawals across the Post Office’s 11,500 branches totaled £878 million, the highest amount on record. Nearly half (44%) of respondents to a recent Post Office survey said they will be using cash to help budget during the festive period.

What’s more, the overall volume of cash deposit transactions, including by businesses, was up more than 450,000 year-on-year (+8.5%), suggesting that businesses in particular are responding to bank-imposed cash limits by depositing smaller values but at higher volumes at their local Post Office. As we reported a few months ago, this is happening despite the fact that large banks in the UK, with the help of the Financial Conduct Authority, are making it increasingly difficult for people to not only deposit cash in their branches but also use the intermediary services offered by the Post Office. 

This raises a key point: cash use is reboundind despite the concerted efforts by the government, banks and retailers to limit its use, which I believe makes this trend reversal all the more impressive.

The UK’s high street banks have already closed some 5,000 branches over the past eight years — at a rate of around 54 per month — and 15,000 cashpoints, or ATMs, over the past five, with hundreds more scheduled to close this year. Both large and small retailers have also refused to accept cash. The government could, of course, step in and do what many state and local governments in the US have done and pass a law prohibiting businesses from not accepting cash.

But that’s not happening. Instead, government is getting in on the act. Many local authorities, for example, have already banned cash as a means of paying for parking. The government even recently proposed closing all rail ticket offices, which would force all passengers to use card-only vending machines or make their purchases online. But the idea triggered such a visceral backlash, particularly from organisations representing the blind, wheelchair-bound and other disadvantaged groups, that the government ended up shelving it two months later.

There have been other small victories along the way. In November, the supermarket chain Booths became the first large British retailer to axe almost all of the self-service tills in its stores, which tend to favour quicker, less fiddly non-cash payments, saying the decision was in response to feedback from customers. A similar trend is taking place in the US where major retail chains such as Costco, Walmart and Wegmans are rethinking their self-checkout strategies, in large part due to an explosion in shoplifting. One study of retailers in the US, UK and other European countries found that companies with self-checkout lanes had a loss rate of around 4%, more than twice the industry average.

There was positive news for cash lovers from other parts of the world this year, too. In Switzerland cash is once against the most frequently used means of payment after losing ground during the pandemic. The same goes for my country of residence, Spain, where three out of four Spaniards continue to use cash on a daily basis, according to a Bank of Spain survey.

Earlier this month, the BBC reported that cash “continues to rule” in India despite a recent boom in digital payments sparked by the Modi government’s demonetisation program, which will go down in history as one of the largest government-led attacks against physical money. The people of Nigeria also stuck with cash despite the central bank’s disastrous attempts to force its floundering CBDC, the eNaira, on the population. As we reported in February, the government and central bank eventually backed down, but only after visiting untold economic pain on millions of Nigerian citizens.

In some countries, including Slovakia and Austria, governments have taken steps to enshrine the use of cash in the national constitution. Austria’s attempt to protect the use of cash through legal means was denounced by Brussels’ European Commission representative in the country, Martin Selmayr, who argued that it contravened EU law. When asked on the matter in November, Paul Gentiloni, the EU Commissioner for Economy, responded that “Member States cannot legislate or adopt legally binding acts in that area, unless the EU empowers them or if they do so for the implementation of EU acts.”

In other words, according to the European Commission, no national government in the Euro Area can pass laws to protect the use of cash — at least not without its say so! The Commission, which has been waging a decade-long war against cash and which, together with the European Central Bank, is determined to launch a digital euro, claims to have sole jurisdiction in this area. It is a reminder that while small but key victories have been achieved in defence of cash this year, the global war against physical money continues unabated.


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    1. The Rev Kev

      I don’t see what the problem is as you can see many mentions of it on a Google search. It’s a perfectly cromulent phrase that embiggens understanding this section.

      1. DJG, Reality Czar

        Rev Kev and Nick Corbishley: I recall “slithers” used in this way from Patience Gray’s classic Honey from a Weed, in which she inserts the occasional slither of garlic or slither of lemon peel.

        I assumed that it is an English usage, because it isn’t used in the U S of A. Gray was a very careful writer, so the expression must be standard (and she grew up around London).

        Finally, I am glad that the Brits have learned again the worth of cash. Here in Italy, cash is still important. As Nick Corbishley points out, many economic factors are trying to dethrone cash as king. The problem is that cash makes counting so much easier, as the article notes.

  1. Colonel Smithers

    Thank you, Nick.

    My former employer, the UK Finance Association / British Bankers’ Association, tracks this data.

    From the outbreak of covid, the public has been increasing its cash holdings, in part due to a fear of ATMs not being stocked even though the amount one can spend on card was increased. However, with the cost of living crisis, people find it easier to manage their budget with the visibility of cash.

    A month ago, I went to a talk by the UKFA chairman. He had been in Washington for the autumn meetings of the Bretton Woods institutions. The lobby group always sent a delegation to their twice a year meetings and engaged US and other officials and politicians at the same time. The chairman reported that gridlock in Washington meant a USD digital currency was going nowhere.

    I raised the issue of financial inclusion, a big issue when I worked there and in tandem with financial literacy, and the need to end the war on cash. That is no longer a concern.

  2. The Rev Kev

    If I recall correctly, a big thing was made of the UK keeping its own currency – the Pound – during the Brexit campaigns and not going with the Euro. So maybe people in the UK remember that argument and see no value in giving up the Pound for digital Pounds that would be arguably worse that the Euro, much less a digital Euro. I think that the Brits actually value their privacy and having a digital currency that would list every single purchase down to the last penny is not to be tolerated. Would you like every single purchase that you make on a database somewhere that has a chance of being hacked? And I bet that lots of Brits noticed when Trudeau cut off all those bank accounts for protesters and can easily see the UK government wanting to do the same if there was a digital currency. You have a Palestinian flag hanging from your house? Your access to money is suspended for a week – no appeals. Something like that could happen very easily in the UK. Besides, there are lots of transactions that go on where neither the Seller or Buyer reckon that it is nobody’s business but their own what they do and certainly regard paying taxes on it as a very unamusing idea. It has been said that the books that you own give an insight to what sort of person you are. Having a database of all your purchases and sales through a digital currency would be a total blueprint of who and what you are.

    1. Jeff V

      I’m currently reading Watching the English, by Kate Fox (an English anthropologist). I haven’t finished it yet, but she seems to be saying that the desire for privacy (and unwillingness to intrude on the privacy of others) is a key part of the English character.

      For instance, the saying “an Englishman’s home is his castle” apparently dates from a historical period in which hardly any Englishmen could be expected to own said home, so is probably not a reference to property rights but rather to the expectation of privacy.

      (I’m not an Englishman myself, but being Welsh most foreigners probably think I provide a reasonable facsimile of one.)

  3. marieann

    I’ll keep paying in cash, thank you and I’d like my items packed in a bag with no logo(which I will provide myself)

  4. Jabura Basaidai

    here in the US it is disconcerting to try and deposit cash in any amount into your bank account – some form of legal ID is required to accompany the cash deposit to the teller – after that happened once to me at my Chase branch, never again – cash is king, pure and simple and all attempts to circumvent it and force electronic payment will hopefully fail miserably – have never been a fan of paying for anything with a CC online and have made it a point to purchase gift cards and use them exclusively on amazon and don’t shop anywhere else on line – yeah, i hate the amazon but sometimes no choice locally where i utilize only cash – will never use auto-pay, still like a paper trail – still need CC for car rental and air travel – at least cash is till used for trains – my 2¢

  5. Mollie Moon

    Large effort to use cash in small businesses. Here’s posters and handouts:


    “What does using cash have on small to medium businesses?

    Businesses save money instantly on transaction fees.
    They have more control over their profits.
    If you can help save that business money, they are more likely to keep staff employed and give back to their local community.
    Small to medium business are an integral part of keeping your local economy and community thriving and growing.

    What’s wrong with a cashless society?

    Cash jobs on the side will no longer be an option, which create economic hardship and higher debt.
    Tech companies have invested heavily in making electronic transactions secure but hackers are always one step ahead. In a world of 100% electronic payments, the risk of falling victim to fraud rises significantly.
    If cash dies, your location and purchases will be tracked automatically. You won’t be able to opt out or unsubscribe.
    If you are on any government funding whatsoever, they could restrict you from spending that money on certain things that the government does not condone….”


    1. JBird4049

      In the United States, it is increasingly normal for local police and some of the three letter agencies, especially the DEA, FBI and CPB to steal physical cash using civil asset forfeitures. The explanation given often is essentially “because we say so.” Then there is the occasional practice of seizing money and valuables in safe deposit boxes by both state and federal agencies using warrants almost as dubious. And finally, the Feds have a habit of seizing entire accounts especially from small businesses under the charge of using “structured deposits” to avoid filling out the required paperwork for deposits of over ten thousand dollars without much evidence. Or individuals have their accounts closed because someone is suspicious of them being baaad people. (I wish I was joking but some of the reasons given by federal agencies often are just that. When the victims can get an explanation.)

      Often the physical cash, coins, and the occasional gold and jewelry, disappears from the record or is never even recorded by the agency or department. One can, if they have the money, hire the lawyers and spend days to years fighting for your property back, which is not a guarantee especially if the government’s records are inaccurate, which seems often.

      We have a war on cash with the poor and working classes, travelers, and small businesses, getting hit the most often. Heck, we have a war that randomly hits people without reason. It is being waged using the reason of fighting crime when often it is a funding mechanism for the government, which doesn’t want to raise taxes, and for corrupt officers. Also, it does encourage people to use debit and credit cards and makes the NSA’s job easier.

      1. swmnguy

        It’s particularly difficult to hire lawyers and spend years fighting to get one’s money back, when the government has already taken one’s money.

        I sometimes, somewhat (but not totally) facetiously, argue that this is a 3rd Amendment issue. Many law enforcement agencies actually use predictions of gains from “civil asset forfeiture” in their budget forecasting and funding requests. In that regard, they’re basically sending their personnel out to forage from the populace. It’s a stretch to call that quartering soldiers in private houses without the owner’s consent, but not a ridiculous stretch.

  6. rfdawn

    Self check-outs have their uses, if they accept cash. One can feed them any number of 10c, 20c coins and they never complain. Doing that to a human operator would ruin their KPIs.

  7. Lynne

    Here in small town USA, my gas stations and my favorite local restaurant gives a discount for cash payments. And when I asked a small service business if he was ok with my paying in cash, he thanked me profusely and said he was tired of paying credit card fees. Many local businesses prefer payment by check because the local credit unions have no-charge remote deposits. The occasional bounced check is more than set off by savings from avoiding credit card fees and chargebacks, or so I’m told.

    1. Keith Newman

      @Lynne, at 4:17 pm
      My experience as well. The local shops where I live prefer payment in cash for the same reasons. The owner of my local French bakery thanks me each time I pay in cash and she doesn’t have to give a cut to a bank.

    2. swmnguy

      I always, but always, tip in cash. For some transactions, only a card will do. But everyone accepts a cash tip.

      I do this from too much personal and second-hand experience of service personnel not receiving tips left on credit cards. It’s a subtle, and nearly universal, form of wage theft. Restaurants in particular are notorious for this.

    3. Del

      Paying cash means the service provider makes more and therefore you should expect a discount of say half their savings in onerous taxes used to buy white phospherous for Israel and house illegal aliens in luxury hotels.

      Also, don’t forget to have contractor buddies make all large tool and building material purchases. They often get a contractor’s discount and can write the purchase price off as an expense against income. Those savings can be split with you.

    1. The Rev Kev

      There was a similar ad made here in Oz about the same era. When the guy was paying with cash after the whole place ground to a halt, the look on the face of the cashier was like if he was offering her a used condom.

  8. Rip Van Winkle

    Friends and acquaintances: “have you seen the show ‘The Black Mirror’?

    Me: “Isn’t that about the Busy-Body Brits? What else is new? Some guy wrote about that in 1948.”

    1. JBird4049

      Well, the Black Mirror is the transistorized moderns’ equivalent of Nineteen Eighty-four being as long form reading is too boring for some. Personally, I find the show less terrifying than the book.

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