Chancellor Rishi Sunak must act to preserve cash in the upcoming budget, according to campaigners from the Access to Cash Review.
According to the group, the UK is at risk of becoming a cashless society sooner than expected, with fewer than one in 10 transactions set to involve cash by the end of the decade.
Over the past 12 months, 13 percent of free UK cash points closed, as lower levels of cash use have made them economically unviable. A quarter (25 percent) of the machines now charge people to withdraw their cash.
The review calls on the government to overhaul laws to make it easier to withdraw cash, such as allowing shops to offer cashback without making a purchase, which is currently illegal.
It also called for laws to ensure that everyone has the ability to make digital payments, reducing reliance on cash. Around 30 percent of the population does not use online banking, according to UK Finance.
Last year, the Access to Cash Review found that the UK could become a cashless society by 2035, but UK Finance now expects the UK to hit this point by 2028.
Currently, around 30 percent of transactions are made in cash, while nearly two million people in Britain are unbanked, meaning they rely on notes and coins to get by.
As a result, Link, the cash machine network which set up the Access to Cash Review, has established a ’request a cashpoint’ service for those finding it difficult access cash.
Natalie Ceeney, chair of the Access to Cash Review, said: “The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy.
"Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.”
UK Finance added: “The banking and finance industry recognises the importance of ensuring cash remains free and widely available for those that continue to need it and, as acknowledged by the Access to Cash Review panel, has introduced a number of measures to achieve this.
“These include arrangements by Link to protect free-to-use ATMs in more remote and rural areas and to ensure that every high street in the UK has free access to cash.
“There is no ‘one size fits all’ approach however and understanding the needs of local communities is critical. That is why, alongside Link’s commitments, UK Finance supports the new Community Access to Cash Pilots initiative, which aims to help local communities develop and support access to cash solutions which work for them.”