Four insights into the UK's use of cash
Issue 334 | 2 June 2022
The UK’s cash habits
As the reduced use of cash in the UK reflects the wider transition to a digital society it is easy to forget the role cash still plays in the UK’s payment mix.
Each week Northey Point analyses the ATM use data released by LINK and publishes a tracker of the UK’s daily, weekly and monthly cash habits (using LINK’s ATM transactional data as a proxy for cash use).
In next week’s tracker we’ll see if the Jubilee Weekend celebrations caused more visits to the UK’s ATM’s.
Before we look at the four insights let’s take a quick look at last week’s ATM use.
Last week the volume of ATM transactions:
decreased by 25% when compared to the final week before the first COVID lockdown.
increased by 4% when compared to the previous week in 2022.
decreased by 1% when compared to the equivalent week in 2021.
increased by 21% when compared to the equivalent week in 2020.
Four insights into the UK's use of cash:
The graph below from LINK shows Thursdays’ transactions over the last four years clearly showing the fall in 2020 as the first Lockdown was announced.
The volume of transactions last Thursday can be seen to be almost identical to the same day last year with the previous larger spike always occurring on the Thursday before Easter.
The following graph shows the recent volume of daily LINK ATM transactions from the last four years clearly showing the fall from pre-pandemic levels but also the increase between 2020 and 2022 with the first Lockdown in 2020 still being in force over this time.
2022 has seen a peak in daily activity in the lead up to the bank holiday with growth falling back again after the weekend. Each year has followed a similar pattern of activity albeit with a significant difference between the pre-pandemic levels and the lows through Lockdown.
Last week there was a total of 32.0 million ATM transactions which represents an increase of 1.2 million ATM transactions over the previous week.
In 2022, there was a decrease of 0.4 million transactions or 1% when compared with the equivalent week in 2021.
In the first few months of the year, volumes in 2022 were consistently greater than 2021 reflecting the differing conditions across the two years.
In the second half of April 2021, with restrictions easing at that time, this led to a spike in activity and the gap between 2021 and 2022 then narrowed to a difference of just 2%. However indoor hospitality did not return until the third week of May and the early May bank holiday failed to provide any further boost last year. In 2022 with all restrictions removed and warmer weather returning the gap over the bank holiday weekend widened with the volume of ATM Transactions at the highest level seen so far this year.
The volume and value of transactions dropped back after the early May bank holiday weekend and with both Volume and Value figures for 2020 and 2021 increasing as Covid 19 restrictions were relaxed the gap across all three years is narrowing.
In the last week the volume of transactions in 2022 has dropped just below the level in 2021 – however the timing of the Bank holiday is probably the reason as this year the Jubilee weekend is yet to happen and therefore the expected boost to cash usage is still awaited.
Volumes and values remain significantly below pre-pandemic levels and it seems certain that there has been a fundamental change in how some consumers are using ATMs and cash. However, even with this overall reduction in usage, around £7 billion has been withdrawn each month since restrictions eased at the beginning of the Summer falling back only slightly in the first months of the year which have always been more subdued but back on track in March and April.
The increase for January 2022 compared to January 2021 and February 2022 compared to February 2021 can again be seen given the differing conditions across the two years with values increasing by 17%. This has continued into March with values increasing by 16% when compared with March 2021. With restrictions beginning to ease in April 2021 the gap has narrowed but the value of ATM transactions in April 2022 still increased by 9% when compared with April 2021 – increasing to £7bn in 2022 compared to £6.4bn in April 2021.
4: Amount per ATM visit
The average withdrawal value increased by almost £20 to over £85 during the first lockdown. Non essential trips were discouraged and this led to fewer outings and thus more cash withdrawn each time. With leisure and hospitality closed there were also fewer opportunities for lower value spontaneous cash requirements.
This was reinforced during each lockdown and the average withdrawal has continued to be high ever since as shown in the graph below.
The average withdrawal value in April was £79.91 almost identical to the previous month, slightly down on 2021, but well above the pre-pandemic average of around £65. The average value may continue to fall as consumers have more opportunities to make spontaneous low value cash withdrawals now COVID-19 restrictions have eased.
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