UK cash withdrawals hit a record high as Brits grapple with inflation

Post Office has attributed the record quantity for private cash withdrawals at its 11,500 branches to extra staycations within the U.Ok. and folks utilizing cash to handle their budgets.

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Britain’s Post Office, which gives banking providers as effectively as mail, dealt with a record £801 million ($967 million) in private cash withdrawals in July.

In complete, greater than £3.3 billion in cash was withdrawn and deposited over the Post Office’s counters — the primary time the quantity has crossed the £3.3 billion threshold in its 360-year historical past.

Personal cash withdrawals had been up nearly 8% month on month at £744 in June, and up over 20% from a yr in the past to £665 million in July.

Staycations and budgeting

The spike in cash use is all the way down to a number of components.

“Firstly, more people use cash when they go on staycation, secondly, the Post Office helped to hand out support to energy customers in the form of cash, and thirdly, people are using it as a budgeting method,” stated Laura Suter, head of finance at AJ Bell.

The Post Office analysis discovered that 71% of Brits planning to go on vacation within the U.Ok. this yr intend to take out cash earlier than doing so. Of those that have holidayed within the U.Ok. within the final 5 years, nearly a third admitted to being caught out by not having cash on them.

In July, the Post Office processed greater than 600,000 cash payouts for folks eligible for power invoice help from the British authorities. That got here to round £90 million and allowed folks to pay power payments, high up gasoline and electrical energy meters or use cash for simpler budgeting.

In complete, £3.31 billion in cash deposits and withdrawals had been processed on the Post Office in July, £100 million greater than in June.

The information comes as the nation continues to grapple with rising inflation. The Bank of England expects headline inflation to peak at 13.3% in October and to stay at elevated ranges all through a lot of 2023.

Is it right here to remain?

The newest figures present Britain is “anything but a cashless society,” stated Martin Kearsley, banking director on the Post Office.

“We’re seeing more and more people increasingly reliant on cash as the tried and tested way to manage a budget. Whether that’s for a staycation in the UK or if it’s to help prepared for financial pressures expected in the autumn, cash access in every community is critical.”

But the rise in cash withdrawals is not a long-term pattern, in response to Suter.

“Cash use will likely fall after the summer, when people are no longer holidaying. But it is likely to continue to be used more by people who are budgeting and want to rely on having physical pots of money to control their spending,” she stated.

“We’re unlikely to see cash use rise to pre-pandemic levels now [that] so many habits have moved permanently online or to digital payment methods.”

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