A lack of action from the Government to tackle declining cash acceptance could lead to a two-tier society with the most vulnerable bearing the cost, a new report by the Treasury Committee finds.
The Committee heard directly from vulnerable groups, including people with learning disabilities, domestic abuse victims and the elderly, that buying essential goods and services can cost more as the number of places where they can spend their cash is reduced.
People who are already at increased risk of poverty will, therefore, face a poverty premium if cash is not widely accepted by businesses and other organisations.
The acceptance of physical currency for goods and services in the UK is not currently specified in any legislation. This means UK businesses and organisations could choose not to accept cash with no legal duty to accommodate customers’ varying needs.
Evidence submitted during the course of the inquiry sets out the challenge when attempting to assess levels of cash acceptance in the UK. For example, data from LINK in 2024 found half of respondents had been somewhere that did not accept cash or discouraged cash usage in the previous eight weeks. However, when polled by Savanta, 98% of small businesses said they accepted cash.
The lack of consistent evidence makes it difficult for anyone, including the Treasury, to determine the state of cash acceptance in the UK. In its report, the Treasury Committee calls on the Government to undertake vastly improved monitoring and reporting of cash acceptance levels. If it doesn’t, it risks creating a two-tier system where vulnerable groups become excluded from community spaces such as leisure centres, theatres and public transport.
When appearing before the Committee, the Economic Secretary to the Treasury stated: “we have no plans to regulate businesses, big or small, to compel them to accept cash”.
Having heard evidence on the impact of declining cash acceptance on vulnerable communities, MPs on the Committee believe there may come a time in the future when it becomes necessary for the Treasury to mandate cash acceptance if those who rely on physical cash are not adequately supported.
The report also highlights the national resilience benefits of maintaining the ability to spend physical cash, particularly in relation to recent bank outages which Members were told led to a surge in cash withdrawals.
Chair of the Treasury Select Committee, Dame Meg Hillier MP said: “The Government is in the dark on how widely cash is being accepted and that is completely unsustainable. We are at risk of a two-tier society where the most vulnerable bear the brunt and this needs to be a wakeup call.
“Our Committee has sought to give a voice to those groups which are at severe risk of not being heard by Government policymakers. A sizeable minority depend on being able to use cash and they must not be forgotten by Whitehall.
“As a society, we must avoid sleepwalking into a situation where cash is no longer widely accepted. This is the beginning, not the end, of our scrutiny of this issue. The Government needs to take this seriously.”