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The decline of cash during the COVID-19 pandemic

A woman walking past hedges and trees, carrying shopping bags

Is cash on the line?

Joel Lewis, Age UK’s Consumer and Financial Services Policy Manager, examines how the decline of cash affects older people during the COVID-19 pandemic and beyond.



During the coronavirus pandemic, many older people have faced serious problems getting hold of cash. So what does the future hold for those who rely on it?

Barbara’s* brother Clive (73) developed delirium after an operation. This caused him some cognitive issues, which meant Barbara registered his Power of Attorney and has been helping to manage her brother’s affairs. Due to the pandemic, Barbara was unable to visit Clive for 8 weeks. He is running out of the cash he needs to pay for his shopping, cleaner and gardener. Clive is unable to write out cheques because of his cognitive issues.

Liu’s** friend Nian told him that all she has is £5 in cash. Nian finds this alarming as there are folk like the window cleaners to pay. She is never without money but cannot physically get out to get some. Liu could pass some to Nian if he were allowed to visit, be he can't. 

These are just are two of many stories the Age UK Advice Line has heard over the last 7 months. 

Going cashless

The UK is becoming an increasingly cashless society. Half of all payments are now made by card and in less than 10 years’ time it is predicted only 10% of transactions will involve cash. There is also a declining number of cash machines with which to access it.

The pandemic has accelerated these previous trends, and it's beome even easier to pay without cash. The contactless card limit increased to £45 and more local shops are now accepting card payments with many scrapping any minimum spend requirement. Those of us able to ‘go digital’ have done so, whether that's online shopping, contactless or mobile payments.

Millions rely on cash

But a cashless society doesn't work for everyone. Older people in particular are likely to rely on cash – for carers, gardeners, and paying back friends, family and neighbours who have done shopping for them. For many it is a habit of a lifetime and they are not comfortable or familiar with other forms of payment. We often hear about older people taking out their weekly pension in cash, as this is how they are used to budgeting their day-to-day spending.

It's not just older people who rely on cash. It's estimated that 8 million adults, 17% of the UK’s population, would struggle to cope in a cashless society. Many people with disabilities like sight loss or dexterity problems find it easier to pay in cash. Victims of domestic abuse may need it to help get away from an abusive and controlling partner, while others may need it to help them budget more effectively. It is (low) income rather than age that is the biggest indicator of cash dependency, and vital for the more than 1 million people without a bank account.

Those who rely on cash must often resort to workarounds if they cannot access it easily, but relying on others reduces independence and could put them at risk of abuse. Not having access to digital shopping and payments also excludes those on the lowest incomes from getting the best deal and even accessing some services altogether.

With free cash machines and bank branches in decline, protecting the existing means of access and ensuring these have an excellent reach across the country is paramount.

Acceptance as well as access

Józef*** works for his local parish council and asked about the older people in the community who collect their pension from the Post Office in cash. However, some Post Offices are closing, and more retailers are not accepting cash. He asks how we can help vulnerable people at this time.

But it is not just problems with getting hold of cash. Many shops have stopped accepting it all together. Businesses and public services going cashless was also a trend that COVID-19 has accelerated. Since the start of the pandemic, 1 in 10 people had been refused by shops when trying to purchase essential items with cash.

It is understandable why businesses would want to go cashless with a potential increased risk of virus transmission from handling cash. There are also the logistical issues and cost of banking it, particularly due to the falling number of bank branches.

What does the future hold for cash?

Lockdown saw some great innovations and perhaps a glimpse to the future of how we might be able to access cash. There were cash delivery services, the Post Office offered different ways to collect it, and codes could be created that allowed trusted third parties like friends and family to collect cash on behalf of someone who could not.

The cash system is a vital part of UK infrastructure, like phone lines and power cables. Lessons learned from countries like Sweden show that once this infrastructure disappears, it is very hard and expensive to build back up. While telecoms networks are being future proofed with the roll-out of fibre broadband and 5G, the cash system also needs to adapt to the demands of a changing society. Decision makers will also need to consider how the cost of the cash infrastructure can be kept down to better incentivise businesses to keep accepting it.

The Government have launched a Call for Evidence on access to cash that Age UK will be responding to. One of the main proposals is to increase use of cash back, which the Government claims EU rules are currently preventing more businesses from doing.

It's not surprising that how people pay bills and make everyday purchases has changed since the start of the pandemic. While cash use has been declining for some time, there is still an urgent need to protect access to it and make it easier for businesses to accept it. While more people will find digital payments more convenient, this issue will not just affect this generation of older people, but future ones too, making it of crucial importance that cash is in widespread use for some time to come.

Benefits and accessing cash - coronavirus advice

The coronavirus outbreak has led to some changes for those already claiming benefits, for those making new claims, and those accessing cash. Age UK has outlined some of these changes.

* ** and *** These names and details have been changed to protect the anonymity of interviewees.

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Last updated: Feb 22 2023

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