Cash is continuing to play a significant role in facilitating transactions as Brits flock to high streets after “Freedom Day”, new figures released today reveal.
A record £665m was withdrawn from Post Office counters in July, the highest monthly total excluding the historically busy Christmas period ever.
Personal cash withdrawals in July were up 4.6 per cent month-on-month and up 14.3 per cent year-on-year, suggesting consumers are flocking back to pennies and pounds after they avoided hard currency amid the worst of the Covid crisis.
Cash usage plummeted during the height of the pandemic as a result of consumers seeking to limit the amount of physical cash they handled to reduce the likelihood of catching Covid.
Many people switched to using contactless card payments, a trend that was already well underway before Covid, prompting experts to predict Britain may soon become a cashless society.
The Financial Conduct Authority estimates that withdrawals from cash machines dropped £37bn in the first 12 months of the Covid pandemic.
Martin Kearsley, banking director at the Post Office, said: “As some banks continue to close branches, either permanently or in response to staff shortages during the pandemic, Post Offices are ‘the last counter in town’ in many places across the country.”
Experts have highlighted the damaging impact a shortage of physical bank branches and cash machines may have on older consumers.
Older consumers typically have higher cash usage rates, meaning a lack of physical bank branches and cash machines could impact their ability to purchase goods and services.
The FCA estimates that in rural areas of the UK, areas where older households are more likely to live, fewer than half of residents have a bank branch within 5km of their home.
“Post Offices will continue to play a key role in local communities’ cash eco-system up and down the country,” Kearsley added.
“Many branches are also open late in the evening and at weekends, providing local businesses with a convenient location to deposit much needed takings and in turn serve their own customers longer too.”
Businesses and individuals deposited over £2bn at Post Offices in July between them.