Cash withdrawals plummet in UK

22 Oct 2021

Cash withdrawals in some parts of the UK are down as much as 63% since the start of the pandemic, according to new figures published this week. Parts of Edinburgh and London have seen cash withdrawn from an ATM drop the most, according to new data from Link, the UK's main cash machine network. On average, usage has plummeted around 40%. The research also shows that the average person in Britain visited a cash machine three times a month before the pandemic. Today, a year and a half on, it has dropped to less than twice a month and it comes as many retailers now refuse to accept cash, or actively discourage it.
Nick Quin, head of financial inclusion at Link, says: “People are choosing new ways to pay for things, and Covid has turbocharged the switch to digital. When we conducted similar analysis this time last year, we had an incomplete picture because before the vaccine rollout people generally were staying local, working from home and many leisure locations were still temporarily closed. Now that life is returning to normal, people are still visiting ATMs much less often and taking out more each time.”
 

Rural ATMs

Earlier this year, the Financial Conduct Authority (FCA), the UK’s financial regulator, warned that people living in rural areas are having to travel further to find somewhere to withdraw and/or deposit cash. The watchdog noted almost every resident in urban areas has access to a bank, building society, post office or ATM within two kilometres of their home, but only three-quarters of Britain’s rural population has similar access. Meanwhile the charity Age UK said that people required the same guarantee of access to cash as they did for running water, electricity and mail. It added that 2.4 million people aged over 65 depend on cash in their daily lives.
 

Global phenomenon

The reason, of course, why cash withdrawals are plummeting is cash transactions are falling. Cash payments fell by 16% globally in 2020, performing in line with the projections McKinsey, the auditor, made last autumn for most large countries (Brazil 26% decline, United States 24% decline, United Kingdom 8% decline). Although the pandemic-driven temporary shuttering of many commercial venues was the primary trigger in this dramatic shift, other actions (such as countries like Argentina, Poland, and Thailand increasing ATM withdrawal fees, and the continued downsizing of ATM networks in Europe) “reinforced and accelerated behavioural changes already under way,” says their research.