UK cash withdrawals hit record high as Brits grapple with inflation

The Post Office has attributed the record amount of personal cash withdrawals at its 11,500 branches to more stays in the UK and people using cash to manage their budgets.

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Britain’s post office, which provides banking and mail services, handled a record 801 million pounds ($967 million) in personal cash withdrawals in July.

In total, more than £3.3 billion in cash was withdrawn and deposited at Post Office counters, the first time the amount has passed the £3.3 billion threshold in its 360-year history.

Personal cash withdrawals rose almost 8% month-on-month to £744m in June, and more than 20% year-on-year to £665m in July.

Stays and budgets

The increase in the use of cash is due to several factors.

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

Post Office research found that 71% of Britons plan going on holiday to the UK this year intend to cash out before you do. Of those who have gone on holiday in the UK in the past five years, almost a third admitted to having been caught short of cash.

In July, the Post Office processed more than 600,000 cash payments for people eligible for Energy Bill Support from the British Government. This amounted to around £90m and allowed people to pay their energy bills, top up gas and electricity meters or use cash to make budgeting easier.

In total, £3.31 billion in cash deposits and withdrawals were processed at the Post Office in July, £100 million more than in June.

The data comes as the country continues to struggle with rising inflation. The Bank of England expects global inflation to reach 13.3% in October and remain at elevated levels for much of 2023.

Is it here to stay?

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

“We are seeing more and more people increasingly relying on cash as a tried and tested form of manage a budget. Whether it’s a stay in the UK or helping to prepare for the financial pressures expected in the autumn, access to cash in all communities is critical.”

But the increase in cash withdrawals is not a long-term trend, according to Suter.

“The use of cash will probably fall after the summer, when people are no longer on holiday. But it is likely to continue to be used more by people who are budgeting and want to rely on having physical pots to manage their expense,” he said. .

“Cash use is now unlikely to rise to pre-pandemic levels [that] so many habits have moved permanently online or to digital payment methods.”



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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!