RACHEL RICKARD STRAUS: The whispers I’m listening to from the very best ranges in banking – and why you need to ALWAYS maintain money in your home

Whether we like it or not, we’re now completely reliant on the digital banking system to manage our money.

As bank branches close and retailers go cashless, it’s almost impossible to opt out.

But what would happen if something went badly wrong and we couldn’t make payments, withdraw cash or manage our accounts for a period?

There are all manner of growing threats to the banking system – from cyber attacks and AI tools going rogue to extreme weather disrupting the power infrastructure on which it relies.

You may dismiss this as doom mongering, but such threats are increasingly being discussed by top officials, including from the Bank of England and Government.

In an off-the-record conversation, an official at the highest level in finance told me individuals should be taking steps to protect themselves.

The Government recently launched a website helping households to prepare for emergencies in their area.

It covers those caused by severe weather and other natural hazards, as well as by deliberate actions or as a result of infrastructure failure.

It advises, for example, on the emergency kit of items you should have at home, and what you should do if you’re travelling during disruption.

You can find it at gov.uk/prepare. It’s well worth having a look when you have a minute. Hopefully you’ll never need to use the advice that it gives, but it’s a good insurance policy to know it just in case.

But what should you do about money?

There are two main steps I’ve taken – and I’d urge you to consider doing the same if you can.

Firstly, even though I make most payments with a debit or credit card, I still keep a small amount of cash.

That way, if there is a temporary disruption to my banking network, at least I should be able to buy small items – hopefully enough to tide me over.

That should also save me scrambling to get cash if there is a disruption.

In April last year, there was a blackout in Iberia in southwestern Europe that impacted over 50million people. Digital payments failed as the power and telecommunications system went down.

ATM withdrawals in the affected area plummeted because the machines didn’t work. But they shot up across the rest of Spain as people sought the security of physical cash during the uncertainty, according to a report by the European Central Bank.

As soon as the affected ATMs went back online, cash withdrawals in these areas shot up too. People didn’t want to risk being caught out again.

The example from Iberia shows us what is likely to happen should a similar outage occur here. We may as well get ahead of it and withdraw a small amount of cash now in case.

The second step I’ve taken is to make sure I have more than one bank account.

That way if one bank suffers disruption, I have an alternative to fall back on.

The Government publishes a National Risk Register of all the serious threats to the UK and what is being done to prepare against them. My advice – do not read it before bed.

Among the risks listed is a cyber attack on a retail bank. It puts the likelihood of this happening at between 5 and 25 per cent. Not likely, but not impossible. And it scores the impact of this, should it occur, at three out of five, where one is ‘minor’ and five is ‘catastrophic’.

The report warns that ‘the most significant impact would be felt by vulnerable customers with only a single bank account’.

Make sure you’re not one of them. Opening a second bank account is free, simple and takes minutes. Do it now before you need it.

To make sure I’m covering all bases, I spoke to Mike Chappell this week, who is a prepper (someone who prepares for disasters) and runs a popular YouTube channel on the subject called UK Urban Prepper.

He believes that everyone should have enough supplies to last them at least two weeks in case of disruption to food or water supplies or other disasters.

He says that having physical cash is a good idea, but that the best protection is having some supplies to hand.

‘What we really need money for is purchasing things to survive,’ he says. ‘So, if you have food, water and everything like that on hand already, that negates the need to have lots of cash.’

Mike recognises that buying supplies in advance can be difficult if your budget is already squeezed.

But he lightheartedly points out that buying tins that last for years can even prove a good investment in themselves.

‘Food inflation is so high that it’s outperforming almost all other investments,’ he says. ‘Invest in some baked beans! A year and a half ago I could buy a tin of Princes corned beef for £2 a can. Now it’s £4.09. There is no account you can get that will give you that level of growth in a year!’

After my chat with Mike, I’ll be adding a couple of extra tins to my next supermarket shop.

Now I’ve taken the first steps to disaster-proof my finances, I’m looking at what else I can do.

My aim this week is to memorise my husband’s mobile number. If I had to phone someone for help in an emergency, the numbers that currently spring to mind are the landline of my best friend in secondary school and the home where I grew up. I need an update.

Preparing for emergencies is nothing new – for older generations, it would have been commonplace. As Mike puts it: ‘We need to be more like our grandparents.’

On that note, I’d love to hear what you are doing to prepare against emergencies – and what you have done in the past. Please let me know. We can all learn from each other.

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