Payments made with cash rose for the first time in a ten years on 2022.
Latest figures from UK Finance has shown that whilst more than half of all payments are being made by debit card, the number of cash transactions has risen by around 400,000 to 6.4 billion in 2022.
Overall, there were 45.7 billon transactions in 2022, up from 40.4 billion in 2021. Debit card payments rose by 18% to 23 billion, while cash payments accounted for 14% of the total.
The analysis shows that the number of people who mainly use cash fell from 2.2 million in 2017 to 1.1 million in 2021 – and slipped further to 900,000 in 2022
However UK Finance, says it still espects cash use to decline over the coming years, once the current financial squeeze has eased.
Even during cost of living pressures and the emergence from lockdowns, it said nearly 22 million people only used cash only once a month or not at all last year. That compares with just under one million who mainly used cash.
People are still most likely to pay for things using a debit card. Part of the reason for that is that people use them to make contactless payments for low-value buys in shops, whereas in the past they might have used coins. The typical amount spent for each contactless card payment was £15.10.
Debit card use rose last year to account for half of the 46 billion payments made by consumers and businesses last year, according to the UK Finance data.
Among consumers, debit cards were used in 57% of transactions.
Some of the rise was driven by people working part of the week at home, and only commuting on the other days. People are travelling to the office less but making more transport payments.
There was a slump in the purchase of annual or monthly season tickets, with consumers instead using their debit card more frequently to pay for individual journeys. Cards loaded onto smartphones and watches are included in the total.
The research also pointed to anecdotal evidence that suggested people were making more visits to supermarkets but spending small amounts each time, rather than doing one large weekly shop..
In another attempt to manage limited budgets, the number of payments made using physical cash increased by 7% last year, compared with 2021, to 6.4 billion payments.
It was the second most popular method of payment, but still only accounted for 14% of the overall total, having been dwarfed by card use.
Adrian Buckle, Head of Research at UK Finance said “There is a wide variety of payment methods available in the UK and each provides specific benefits to the people using them.”
“During 2022 we saw increased use of contactless, online banking and mobile payments, although cost-of-living challenges meant that some people preferred to use cash to help with their budgeting.”