The Access to Cash Review has published its final recommendations, calling on the government, regulators and banks to act now or risk leaving millions behind.

The review concluded that digital payments don’t yet work for everyone and around eight million adults - or 17 per cent of the population - would struggle to cope in a cashless society.

Cash is only used for three in every ten transactions, down from six in 10 a decade ago, and is forecast a fall to as low as one in 10 transactions within the next 15 years. This shift away from cash towards digital payments is placing significant strain on the UK’s cash infrastructure, which currently costs around £5 billion a year to run.

As bank branches and ATMs continue to close, the economics of handling and accepting cash will lead to an increasing number of retailers to go cashless, the report noted. Given these pressures, the review warned against leaving access to cash to market forces, and urged the government and regulators to take action to ensure cash remains viable for as long as people need it.

Natalie Ceeney, independent chair of the review, said it was worrying that the cash system is falling apart.

“ATM and bank branch closures are just the tip of the iceberg, underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines,” she stated, citing Sweden as a cautionary tale to plan now “because once infrastructure had gone, putting it back was close to impossible”.

Ceeney said that rather than “preserve the past in aspic”, the industry needs to innovate, asking why can cash not be accessed at local shops, through cashback, as well as at ATMs?

“Why can’t we support small businesses by letting them deposit their cash in lockers or smart ATMs rather than face the security risks and costs of a weekly trip to their bank branch? There is huge scope for innovation, not just in digital payments, but also in cash.”

Nicky Morgan, chair of Treasury Select Committee, which has led inquiries into the issue, called the publication of this report “an important milestone” that lays out a framework for policymakers.

“Tinkering around the edges to preserve the status quo will not work, it’s clear that something more fundamental is needed,” she commented. “This report sets an expectation that the government, the regulators and industry will respond with a plan of action.”

The review gathered evidence from more than 120 organisations from across the leisure, retail, financial, charity and business sectors. It also travelled the country, taking evidence from thousands of people including workshops in places including Shetland, Porthmadog and Bournemouth to understand the current needs of consumers and groups across the UK. The review also explored the lessons learned from Sweden and China.

In its interim report, the review identified approximately eight million people who would be left behind. The risks to people include:

• Viability of rural communities: where broadband and mobile connectivity is poor, and where the local cash infrastructure is reducing.
• Loss of independence: for people who currently rely on cash for informal support.
• Rising debt levels: for those on tight budgets, using cash helps to stay out of debt.
• Financial abuse: cash can give independence in a difficult or abusive relationship.
• Poor paying more: denied access to goods and services which can be bought online or via direct debits, or even given reduced access to the high street as shops and cafes go cashless.

The panel will meet again in September to discuss the impact of the review and to assess whether further action is necessary.

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