Has the coronavirus pandemic hastened the end of cash?


British five pound noteIn recent months, you’ve probably noticed that many shops have been unwilling to accept cash. While this wasn’t unknown before the pandemic, it is now much more common.

In order to reduce the risk of staff catching the virus through surface transmission, many businesses have switched entirely to contactless payments. According to a study by UK Finance, these now account for more than a quarter of all payments in the country.

This change has made many people wonder if the pandemic has hastened the end of cash. Read on to find out if this is true and who it’s likely to affect.

Cash usage has declined significantly in recent years

At the start of the pandemic, the government raised the cap on contactless payments from £30 to £45, due to fears that the virus could be spread through contact with coins and banknotes. According to the Guardian, there are also further plans to raise this limit to £100 from 15 October.

While this move is likely to reduce cash use, it is only accelerating an existing trend. In recent years, there has been a sharp decline in cash usage in the UK.

There are two main reasons for this. The first is that it is often much more convenient to simply use card payments instead of having to count coins and notes. The second is that due to the closure of many bank branches in recent years, it can be harder for consumers to access physical cash.

According to a study published in the Guardian, current trends show that by 2024, only around 7% of payments might be made with cash.

Older people are one of the biggest groups who may suffer without access to cash

While the move towards contactless payments may seem like a sign of progress, it could potentially pose an issue to millions of people in the UK.

One of the groups who might be most affected are the elderly. According to research by Age UK, published in the Guardian, around 2.4 million people aged 65 and older rely on cash for almost all of their day-to-day transactions. This is almost one-fifth of older people.

The survey also found that millions of people are unable to access the cash they need to pay for essentials due to the drop in local ATMs. Between 2017 and 2020, almost 13,000 free-to-use cash machines closed – a drop of nearly a quarter.

Who else would be affected?

While old people may be the most badly impacted by the change to contactless, it could affect other groups. These include:

Small traders

In the modern economy, it’s hard enough for small business owners to compete with online retailers, but the move to contactless payments could make it even more difficult. This is because they may have to pay additional fees on digital and contactless payments.

Service industry workers

If you have loved ones who work a part-time job in the service industry to make some extra money, you’re probably aware of how much they rely on tips. Without cash, tipping may become much less common as it’s no longer as convenient.


Many charities rely on cash donations as a large part of their income. Without people being able to donate in this way, charities may not be able to help as many people as they did before.

There are potentially also privacy concerns over the move to contactless, as all transactions can be monitored and potentially blocked. Cash payments, on the other hand, are anonymous.

Is it likely to be the end of cash?

While it’s easy to worry about what the rise in contactless payments will do to cash usage, on balance it seems likely that cash will continue to exist as a part of our lives – even if we don’t use it as much.

While many businesses have refused to accept cash in recent months due to the pandemic, since the end of lockdown restrictions this has begun to change as life goes back to normal.

Cash has a variety of uses, from being widely accepted to its usefulness for budget management. Furthermore, while many young people grew up with contactless payments, a large portion of the population still prefers to use cash for their day-to day payments.

Get in touch

If you want to know more about changes to the economy and how they could affect you, get in touch. Please email info@investmentsense.co.uk or call 0115 933 8433.