The rapid decline in cash use during the pandemic has eased as consumers return to their preferred payment method, a report says.
Many people have been forced to try alternative spending options due to Covid restrictions, banking trade body UK Finance has said.
But it added that their preferred method hasn’t changed radically.
It is further projected that cash consumption will decrease and will account for 6% of payments by 2031.
“Rather than the UK becoming a cashless society over the next decade, the UK will transition to an economy where cash is less important than it used to be, but continues to be valued and preferred by many,” reads the report .
The trend of the last decade has been the significant increase in the spread of card and especially contactless payments. Debit or credit cards were used for 57% of all payments in the UK last year.
In comparison, the use of banknotes and coins has fallen from 55% of payments in 2011 to 15% last year.
During the pandemic, the number of total payments made declined. Cash consumption, in particular, plummeted during lockdown and as retailers promoted frictionless payments.
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Now the UK financial report suggests that long-term trends will continue as if there had been no impact from the pandemic.
While 42% of consumers make just one transaction or fewer in cash each month, Adrian Buckle, head of research at UK Finance, said many people were reverting to their first preference when paying.
“Payment trends in general tend to change slowly because we all develop habits about how we pay for things and they don’t change that easily,” he said.
Natalie Ceeney, who is leading the Access to Cash work, said: “It is now widely recognized that those who rely on cash tend to be older, poorer or more vulnerable and many of them simply cannot go ‘digital’.
“I am very pleased that after many years of campaigning on this issue, the industry is working hard to put solutions in place and we should finally have legislation protecting access to cash within the next few months.”
Another factor in using cash is the rising cost of living.
Mr Buckle said cash gained some popularity during the financial crisis earlier in the last decade, but as then, it had relatively little impact on the longer-term decline.
The Post recently reported that its counters processed £801million in personal cash withdrawals in July, the most since records began five years ago.
Drivers of the increase were the use of cash by customers and the popularity of staycations.
In May, Salford University student Kira Hayward told the BBC she took inspiration from social media to deal with rising costs by withdrawing cash from her bank account.
She puts it in different labeled envelopes to make sure she has money for food and bills.
“I went on Instagram and YouTube and I saw these physical budget folders,” she said. “I take the money from the bank and budget for things like my groceries. When I know I have £80 for my personal purchase for the month, I know I can’t go over that.”
However, the UK financial report suggests that young people are becoming comfortable with budgeting using smartphone apps and keeping track of their bank balance digitally.
Mr Buckle said they would log into accounts several times a day. Instead of using cash to budget, many would consider all cash withdrawals as already “spent” since they would have already reduced the bank balance shown on screen.
The report also challenged the notion that younger people were more reliant on “buy now, pay later” products than others. The trade organization’s limited investigations found that about one in eight had used these services, but they were most likely between the ages of 35 and 44.
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