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In 2019, UK Finance found that 7.4 million people in the UK led a largely cashless life, meaning one in every seven people chose have forgone cash, and rising to one in four for those aged between 16 and 34. The decline in cash use has been exacerbated by the coronavirus pandemic, which has seen both customers and businesses shy away from paper bills in favour of card payments due to concerns around hygiene.

Link, a network of ATMs across the UK, has stated that although cash withdrawals have decreased by 60% during the lockdown, £1 billion is still being withdrawn each week. While cash use has faced a long-term decline, falling by another 15% in 2019, it remains the UK’s second most popular payment method after debit cards. If these trends are to continue, what will our society look like?

One advantage of a virtually cash free society is that economic crime and tax avoidance will be easier to identity; the move to an online system means that all transactions will be recorded, reducing the frequency of undeclared cash-in-hand payments which are estimated to cost the government £8bn in lost tax revenue annually.

Research shows that a cashless society would also help savers, as all transactions would be clearly depicted on bank statements, making it easier to track spending. Admittedly, some find it harder to save when using a debit card – while a daily allowance of £30 in cash runs out once you have spent it, a debit card allows you to keep spending until all your money has run out. Furthermore, some people experience a fear of checking their bank balance, leaving them wilfully ignorant of their spending habits.

A cashless society would also have numerous disadvantages, notably for those that are most vulnerable. According to a 2018 Access to Cash Review, 47% of people consider living without cash problematic while 17% believe it to be nearly impossible. Currently, around £1.3 million people in the UK do not have a bank account, and for them access to cash is crucial. This is especially important for older people who lack the skills and technology necessary to use online banking, as well as residents of rural areas, where average broadband speeds are up to two times slower than in urban areas.

Cash is also critical for those with mental and physical disabilities that make it difficult to use digital services, or those that rely on others, such as neighbours or caregivers, to buy goods for them. Finally, the use of cash can be critical for victims of domestic abuse as it is often easier to hide than a debit card, where all transactions can be easily monitored by the abuser. Before celebrating the advantages a cashless society can bring, it is important to consider those that still rely on paper money.

The consumer group Which? has successfully petitioned the government to protect cash so that those that are most disenfranchised are able to pay for the goods and services that they need. In March 2020, the Chancellor of the Exchequer, Rishi Sunak MP, promised to safeguard cash in his budget by introducing legislation that ensures the sustainability of the UK’s cash infrastructure in the long run. However, it is important to not only conserve cash itself but also insist that small businesses continue to accept bills, that bank branches remain open to allow for cash deposits and that access to ATMs continues to be widely available both in the context of COVID-19 and its aftermath.

Transitioning to a cashless society could help the UK combat tax avoidance and promote saving amongst its citizens. However, while over a million people remain unbanked, the UK should proceed cautiously instead of speeding towards a cashless society so that its benefits can be reaped without disadvantaging older people, rural residents and vulnerable groups.

Polina Melnikova is currently undertaking a week’s work experience with Bright Blue. The views expressed in this article are those of the author, not necessarily those of Bright Blue.