How usually do YOU use money? Millions nonetheless depend on it says JOHN HOWELLS

The use of cash has dropped steeply over recent years. Many people now prefer the ease of banking online and using contactless payments. 

But there are still many people who still rely on cash. In fact, research from Link suggests five million still reply on cash day in, day out. 

John Howells is the chief executive of Link, the Britain’s largest cash machine network.

Here, he shares why securing the future of physical money and helping people better transition into a digital world will be key for the next government. 

How often do you use cash? Is it less often than it used to be, or more? 

As the chief executive of Link, I’m acutely aware that fewer people are using cash than ever before. 

They are choosing to use options which suit them better – because many people can now bank online, pay with contactless, and check their balance at the swipe of a finger.

But our research suggests that there are still five million people who rely on cash day in, day out. 

They’re overwhelmingly likely to be living on a tight budget and using cash to help make sure ends meet. We can’t afford to leave those people behind.

Before the last election in 2019, Link funded a seminal piece of research which warned that the UK was sleepwalking into a cashless society. 

The Access to Cash Review, independently led by Natalie Ceeney CBE, called for swift action to protect the most vulnerable in society from the rapid shift to digital.

At the time, just four people in 100 told us that they never carry cash. 

Since 2019, people have voted with their feet and chosen the convenience of contactless payments, or shopping online. Today, 14 per cent of people say they never carry cash.

Even those who do carry cash are less likely to be paying for everyday items in cash than they were. That’s why Link cash machines issue £100million less every day to consumers compared to a short while ago.

The trend is only going one way. UK Finance forecast that just 7 per cent of payments will be made in cash by 2032. 

But not everyone can use a mobile banking app. 

Not everyone can budget with contactless payments which could go out of your account today or next week. 

Not everyone is confident in the security of digital payments.

Since 2019, Link has taken decisive action to protect access to cash across the country. 

We’ve funded thousands of machines in areas which could otherwise be cash deserts, and recommended new banking hubs in every part of the country. 

Through this work, we’ve ensured that the same proportion of people live within 1km of free cash access as they did, despite the overall number of machines reducing.

We were delighted to see the Government back that work up in law last year. 

But with an election now looming, it’s right to ask what the next Parliament means for access to cash.

Looking forward to the end of the decade, it’s clear that cash usage will become less and less common. 

The protections laid out in the Financial Services and Markets Act 2023 will make sure that, despite decreasing usage, people can still access cash conveniently. 

We are pleased that all the major parties have identified the role that banking hubs are playing on the high street too.

But the next government will want to think creatively about the future of payments. 

The current Treasury Policy Statement does not specify the need for face-to-face services at hubs, but they are a popular part of the service providing a crucial point of contact for people on their high street. 

The fledgling National Payments Vision does not yet set out a clear route of travel for the UK maintaining its world leading status in payments. 

And there is no coherent plan yet for getting people ready for the digital world.

Without bold action, customers in five years’ time could be face significant exclusion if they rely on cash. 

Cash users already miss out on some of the best deals if they’re not online. 

In five years’ time, if you need to use a special counter to pay for groceries in cash because many manned cash registers have faded away, it could make life hard for some of the most vulnerable people in society.

But there’s no reason it has to work that way. 

If we want a world where everyone can continue to choose how to pay, we must ensure the transition to digital is fair. 

That means protecting access to cash for as long as people want it, but also giving them the tools they need to use other means of payment. 

Whether that is through a comprehensive approach to digital inclusion, or through designing universal digital banking services, the next Government has a key role to play.

LINK has been working with local partners in Wales, Devon and Northern Ireland to look at how local communities can upskill people with the basic digital knowledge they need to thrive as the world becomes less analogue and more digital. We are helping to teach the basics on email and ‘the internet’. 

For many, digital wallets and open banking are part of a new and off-putting foreign language. 

We have seen that people need support in their communities from people that they trust and understand. 

The truth is, however, this needs concerted national energy directed at this rather than a patchwork of local solutions.

At the start, I asked about your cash habits. Whether you are using no cash at all, less than before, or still get your wallet out and use cash at every opportunity, you still rely on a robust cash access network. 

If digital systems go down, cash is the only alternative. That’s just one reason why we’ll continue to protect access to cash for as long as it is needed. 

But it would be shortsighted to just focus on protecting cash, when we need to prepare for a digital future that works for everyone, all the time.