One in five older people rely on cash for everyday spending

Millions still using cash during national lockdowns

Age UK calls on the Government to guarantee access to cash for all

In its new Behind the Headlines report ‘Short-changed: How the decline of cash is affecting older people’ – published today – Age UK warns that being cut off from cash and banking services is tantamount to being excluded from society, and is a risk for many more of us than is often assumed.

Even before the pandemic many older people still relied heavily on cash, with some being completely dependent on it. Findings from the Financial Lives 2020 Survey found that around 2.4 million people aged 65 and over in the UK relied on cash to a great extent in their day-to-day life – representing around one in five (21 per cent) of all older people[i]. They used it for almost all their payments, so retaining access is clearly fundamental to their daily lives.

While cash use has declined over the last year, the Charity says it would be a mistake to assume that everyone in our society is willing or able to make all their financial transactions digitally. A YouGov survey in January 2021 found more than half of – equivalent to nearly 6.3 million – older people (65+) in Great Britain had used cash within the last week, despite the UK being in a national lockdown and with many older people shielding at home. Furthermore, nearly three-quarters of – equivalent to around 8.8 million – people 65+ and almost two-thirds of – equivalent to around 25 million – adults under 65 in Great Britain used cash at some point in the last month[ii].

National lockdowns, which led to the shutting of all but essential retail and the nation being asked to stay at home, severely restricted opportunities to spend cash. Those who were more vulnerable to the virus, including millions of older people, were asked to shield at home.  At this time, many older and disabled people were forced to rely on family, neighbours, and volunteers to get shopping and pay bills on their behalf, with cash often the preferred payment or repayment method.

Eileen, aged 72, told Age UK: “People were lovely and would do some shopping for us, but I didn’t always have money in the house to pay them, and I couldn’t access money. Finding loose change for somebody who went and got the paper for me; that’s 70 pence, but then you realise you’ve only got a £10 note. That £10 would go so quickly, and I couldn’t just go to the ATM [Automatic Teller Machines]. The ATM in our village is nearly always empty. All these little things that we take for granted suddenly become huge problems.”

Being able to use cash helps people on a low-income budget more effectively, pay back a carer or friend who shops for them, as well as acting as an essential back-up for those who are not online or who live in an area with poor connectivity. Many people with health conditions, disabilities and dexterity issues find paying in cash much easier than with a bank card or a phone – it’s not easy for someone with sight loss to use a card reader, or someone with bad arthritis in their hands to hit the right buttons on a smart phone.

The last 15 months have seen falls in the number of payments made in cash, as with most payment types[iii], because people have had fewer opportunities to spend, or are doing so online, using contactless cards, or making digital payments, rather than using cash. In one of the Charity’s Your Voice surveys during this health emergency, one in six respondents who use cash found it difficult to do so[iv] and a quarter of panel members had been refused when they or someone on their behalf have tried to pay with cash[v]. Declining use and provision of cash consequently mean that more and more businesses and other service providers are refusing to accept it – a vicious circle.

While the pandemic has had a significant effect on spending behaviour and cash usage, £81 billion was still taken out from ATMs last year[vi], equivalent to £221 million every day, £9.2 million an hour, or £153,000 a minute[vii]. This is equivalent to every adult in the UK withdrawing more than £1,500 each[viii]. Even amid national lockdowns, with older people shielding, fewer ATMs available and bank branches shut, it is obvious that millions still needed cash for their essential spending.

The decline in high street banks and local ATMs before the Covid-19 pandemic made access to cash even more problematic.  Almost 13,000 free-to-use cash machines closed between 2017 and 2020 – a drop of nearly 24 per cent[ix].  There are also significant regional and national differences in the number of ATMs across the UK. For example, residents in the East Midlands have around 28 per cent fewer ATMs per head of population than the UK average and around 40 per cent fewer than those living in Northern Ireland[x]. Those who struggle getting around are finding it increasingly difficult to access their income, pensions, and savings, and in 2020, around 900,000 older people in the UK found it difficult to get to a cash point using ordinary forms of transport[xi].

Alongside the plummeting number of ATMs, banks are deserting many communities, with thousands of branches shut, reducing their hours, or scheduled to close. Since January 2015, 4,299 have shut[xii], leaving high streets and town centres across the UK starved of access to cash and banking services. Between 2012 and 2020, the South West of England – the ‘oldest’ region of the UK[xiii] – saw the highest proportion (33 per cent) of its bank and building society branches closed[xiv]. Contrary to popular belief, it is not only rural areas suffering from declining cash access. In fact, recent research by the Financial Conduct Authority (FCA) shows that areas classified as ‘multicultural metropolitans’ witnessed the biggest decrease in free-to-use ATMs between March 2018 and 2020[xv].

To avoid the nation sleepwalking into becoming a cashless society which ignores the needs of millions of citizens, Age UK is calling for the urgent introduction of a Universal Service Obligation (USO) on banks to guarantee access to cash for everyone[xvi]. USOs already exist for water, electricity, post, and more recently, broadband services – recognising how essential they all are to our daily lives. The Charity believes the time has come for the Government to put the cash system on the same footing. 

The report also highlights the close connection between cash dependency and digital exclusion. The vast majority of older people are perfectly capable of managing their money themselves, but the rapid move to online banking and digital payments has left many struggling because of the technology. 51 per cent of those aged 65+ do not use or have not recently used internet banking, compared to only 10 per cent of those aged 25-34[xvii]. Age UK research has shown that “there is little evidence that significant numbers of those previously digitally excluded have been prompted to get online during the first few months of the pandemic”[xviii].

Caroline Abrahams, Charity Director at Age UK, said: “This report demonstrates the continuing critical importance of cash in our society. It’s not only essential for older people but for us all, in a world increasingly compelling us to manage our money digitally. Protecting the cash system is essential for enabling millions of citizens to go about their lives, and since it was still widely used during the pandemic, when spending opportunities were few, it’s going to be all the more important for us once we emerge from it and return to some kind of normality.  

“Older people who use cash and their local bank branch are finding it increasingly impossible to manage their money because more and more barriers are being put in their way. They don’t want to give up their independence by having to rely on a family member or neighbour, they want to keep control of how they do financial things – but they don’t want to or can’t do it online.   

“It’s time for the Government to recognise how important banknotes and coins are to all our lives and treat the cash system as the essential piece of infrastructure it is – just like utilities, post and broadband. If the Government is serious about ‘building back better’ after the pandemic, then they must legislate to protect cash access within a reasonable travel distance of people’s homes. This will not only help the millions of citizens of all ages who risk being excluded from society if cash is allowed to die, but can also help revitalise our high streets as local businesses strive to recover from the last nightmarish 15 months.” 

[i] Figures from The FCA’s Financial Lives 2020 Survey - Attitudes data table (sheet AT12 table 127) (available on fca.org.uk and accessed 26 May 2021) scaled up to population estimates using ONS mid- 2019 population estimates (sheet MYE1, ONS Mid-2019: April 2020 local authority district codes) (available on ons.gov.uk  and accessed 26 May 2021).

[ii] Figures from YouGov Profiles Great Britain, 31 January 2021 dataset. Total sample size: 29,860 GB Adults 18+. Scaled up to population estimates using ONS mid-2019 population estimates (sheet MYE1, ONS Mid- 2019: April 2020 local authority district codes) (available on ons.gov.uk and accessed 26 May 2021).

[iii] From UK Finance’s UK Payment Markets Summary 2021 (available on ukfinance.org.uk and accessed 18 June 2021).

[iv] Age UK’s Your Voice panel is a self-selected panel and in November 2020 the panel consisted of 790 people aged 50+ years. The panel is not representative of the 50+ population and is particularly weighted towards those aged over 75 and those perhaps less likely to engage with other research or panels. For example, in this survey 41% of panellists are aged 75+ compared with only 22% of those aged 50+ across England. The panel also aims to include ‘seldom heard’ voices and panellists are recruited through a wide range of sources offering a choice of how to take part – online, by post or by telephone. Panellists were asked “since the start of the pandemic, how easy or difficult has it been for you to get cash from your account?” with a baseline of 547 panellists who have a bank account or use cash.

[v] Age UK’s Your Voice panellists were asked “since the start of the pandemic have you, or someone on your behalf, been refused when trying to pay for goods and services with cash?” with a base all (599) respondents.

[vi] Figures from LINK statistic and trends (available on link.co.uk and accessed 1 June 2021). Figure rounded to nearest billion.

[vii] £81,010 million (£81 billion) was withdrawn from the network of LINK cash machines in 2020, a leap year. This is the equivalent of £221,338,797 for each of the 366 days last year, £9,222,449 for each of the 8784 hours, and £153,707 for each of the 527,040 minutes. LINK data from link.co.uk and accessed 1 June 2021). Figure calculated with no rounding of the £ figures.

[viii] From LINK: Consumers still withdrew £1,500 per person in 2020, despite ATM transactions falling by 37% (available on link.co.uk and accessed 1 June 2021).

[ix] From a high in 2017 of 54,599, the number of free-to-use ATMs across the UK connected to the LINK network fell by 12,872 to 41,727 in 2020[ix], a fall of 23.58%. Figures from LINK statistics and trends available on link.co.uk and accessed 1 June 2021).

[x] Figures from House of Commons Library Briefing Paper Bank branch and ATM statistics (available on parliament.uk  and accessed 1 June 2021). Author’s calculations with percentage figure rounded to nearest whole number.

[xi] Figures from The FCA's Financial Lives 2020 Survey - Demographics data table (sheet Demo’s table 160) (available at fca.org.uk  and accessed 26 May 2021) scaled up to population estimates using ONS mid-2019 population estimates (sheet MYE1, ONS Mid-2019: April 2020 local authority district codes) (available at ons.gov.uk and accessed 26 May 2021).

[xii] Figures from Which? (available on which.co.uk and accessed 21 June 2021).

[xiii] From the Resolution Foundation’s Ageing, fast and slow (available on resolutionfoundation.org and accessed 15 June 2021).

[xiv] Figures from House of Commons Library Briefing Paper Bank branch and ATM statistics (available at parliament.uk and accessed 1 June 2021). Authors calculations with percentage figure rounded to nearest whole number.

[xv] From the FCA’s Access to cash – mapping the territory (available on fca.org.uk and accessed 1 June 2021).

[xvi] Owing to the rapidly changing landscape, Age UK believes the USO should be reviewed every five years to ensure its continued suitability.

[xvii] Figures from the ONS’s Internet access - Households and individuals, 2020 (Table 6) (available on ons.gov.uk and accessed 1 June 2021).

[xviii] From Age UK’s Briefing Paper Digital inclusion and older people – how have things changed in a Covid-19 world? (accessed 1 June 2021).