The number of people who rarely use cash fell last year as cost-of-living concerns grew, while the number of payments being made using physical coins and banknotes rose for the first time in a decade. UK Finance said that 21.6 million people across the UK used cash only once a month or not at all in 2022 – falling back from 23.1 million the year before.
But, due to the higher total volume of payments made last year, the share of payments made using cash still fell slightly, from 15% to 14%. Cash remains the second most frequently-used payment method, although a decade ago, more than half of all payments were made with cash. He added that “it does really depend on what happens to the economy, what happens to incomes as compared to the cost of living” and the extent to which consumers feel confident about being able to keep their financial commitments. Meanwhile, half of payments made in the UK last year were by debit card, marking the first time this has happened.
UK Finance said its data also suggests that there has been a shift towards an increasing number of transactions that are each worth a lower amount, without necessarily increasing the overall amount spent. Anecdotal evidence suggests that people are, for example, making more, smaller visits to supermarkets rather than doing one large shop.
The average value of contactless payments continued to grow in 2022 at £15.10, up from £12.66 in 2021. Some 86% of adults also used a form of remote banking last year, the report said. Those aged 25 to 34 tended to be using BNPL most, with 18% using it in 2022. But the proportion of older people using BNPL is on the rise, with 8% of over-65s using it, compared with 4% in 2021.