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9 Aug, 2022 05:55

UK sees new inflation-driven cash withdrawal record

Personal withdrawals soared in July, Post Office data shows
UK sees new inflation-driven cash withdrawal record

Britain’s Post Office, which also offers financial services, said on Monday that it handled a record £801 million ($971 million) in personal cash withdrawals in July. This was up by almost 8% month-on-month, and over 20% from a year ago. 

In total, more than £3.31 billion (over $4 billion) in cash was reportedly withdrawn and deposited at the Post Office’s 11,500 branches, the first time the £3.3 billion threshold has been crossed in its 360-year history.

The turn to cash comes as the nation continues to deal with spiking inflation. The Bank of England expects headline inflation to peak at 13.3% in October and to remain elevated throughout much of 2023.

The report pointed out that more Britons were opting to use cash to manage their budgets “often on a day-by-day basis.” It attributed some of the withdrawals to holiday goers needing cash for "staycations" in the UK this summer. The figures were also boosted by around £90 million ($109 million) worth of payouts to people eligible to receive energy bill support from the government, the Post Office noted.

The latest figures show Britain is “anything but a cashless society,” according to the Post Office’s banking director Martin Kearsley.

“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 prepare for financial pressures expected in the autumn, cash access in every community is critical,” he said.

The use of cash has been declining in Britain in recent years. Transactions with cards outpaced those with cash for the first time in 2017, thanks in part to contactless payments, according to data published by the finance trade association UK Finance. The trend accelerated sharply during the coronavirus pandemic.

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