How will the demise of cash affect your business?

The use of cash as a payment method is declining. Here we examine why, and look at how a cashless society could affect financial advisers and accountants


The rapid decline of cash as a preferred payment method is not going unnoticed. Despite accounting for 45% of all UK payments in 2015, cash use had dropped to just 17% five years later.  

If this trend continued the same trajectory, cash would disappear by 2026, according to the Access to Cash review. In light of this, you might assume the UK’s supply bank notes would also be falling. But perhaps strangely, this is far from the case. 

Recent data from the Bank of England shows there are over 4.7 billion notes in circulation in the UK, collectively worth roughly £82 billion.  

By comparison, in 2014 there were 3.1 billion notes, together worth about £56 billion. 


Cashless society 

This tells us that although the move to a cashless society seems inevitable, and will clearly bring many benefits, it’s unlikely to occur as soon as many are predicting. Furthermore, a couple of recent studies have highlighted several drawbacks of ditching cash too soon. 

The Financial Conduct Authority’s Financial Lives 2020 survey found that 5.4 million adults relied on cash to a very great or great extent in their day-to-day lives. Dependency was highest among adults aged 85 and over, with 42% of relying on cash. Some of these people may be your clients. 

Here we look at the demise of cash and examine how it might affect the advice and accountancy sectors. 

What is the Access to Cash review? 

Launched in July 2018, the Access to Cash review was independently commissioned to assess the future of cash within the UK, given the rapid decline of its use. The review’s core objective was “to ensure that there remains an effective and inclusive cash access service that meets the needs of all consumers, regardless of their personal circumstances, for as long as necessary.” 

In the review’s final report, published in 2019, it argued that cash remains essential to a functioning economy, as “everyone needs to have a safe, reliable method of payment which meets their needs.” 


What’s causing the demise of cash? 

There are a couple of main factors at play here. 

The first is the growing use of debit cards, which has obvious attractions – making payments is quicker, easier and more secure. As such, 98% of adults now own a debit card, and are using it with greater frequency. 

For those who store their debit card details on phones and smartwatches, the payment process is even slicker. 

The second reason is the sharp recent fall in the number of automated teller machines (ATMs). According to parliamentary research, the number of ATMs in the UK fell by 13,679 (21%) between July 2018 and May 2022. Strikingly, the report also identified a fall in the number of ATMs in all regions and countries of the UK, with the largest drop found in the London. 

Recent events, such as the pandemic, have accelerated the speed of cash’s decline. With the country locked down for extended periods, people and businesses were left with no choice but to conduct affairs digitally. In many cases, it was what enabled them to survive.  

As a result, almost two thirds of small businesses now hold less cash as a result of Covid-19, according to FCA data.  

Who would suffer in a cashless society? 

While the use of cash will inevitably continue to diminish over time, many people still rely on physical money to meet their day-to-day needs. If it disappeared completely, there is the risk certain people and small businesses could get left behind.  

The Access to Cash final review found that “older people, those on a lower income, and people with certain physical and mental health problems are particularly likely to be affected if society went cashless.” 

For older generations, switching to digital payment solutions may not always be straightforward, with adoption rates tending to be significantly lower than younger generations. 

The situation with contactless payments offers a case in point. 

Further findings from the review showed that while 63% of all adults in the UK made a contactless payment in 2017, those between 25 and 34 were most likely to use contactless. In contrast, the over 65s were the least likely demographic.  

Small and medium-sized enterprises, which may form a proportion of your client bank, could also suffer in a cashless society.  

The FCA’s Financial Lives 2020 survey also found that while small businesses have seen the level of cash payments decline by 15% since before Covid-19, with contactless payments upticking 10%, cash is still the preferred payment method for small value transactions. 


How might this impact your business? 

Technology is now embedded in our everyday lives, including the way customers pay for financial advice and accountancy services. 

As such, for advisers, the move to a cashless society will likely have little impact on your own business affairs. In another article this month, we wrote about the impact technology is having on the financial advice process. You can read that here

Though not strictly cash, you may find that some of your clients still prefer to fund their investments and pay for their bookkeeping services using other physical payment methods such as cheques. They too are falling out of favour, and in much the same vein as cash, phasing out cheques too soon could affect some of your clients. 

Accountants, meanwhile, should stand to benefit from the demise of cash. Electronic reconciliations are more efficient than those that involve cheque stubs, physical receipts and in some cases, scribbles on pieces of paper. 

In recognition of the important role technology must play in simplifying the tax return process, the government has introduced the Making Tax Digital regime, which will be rolled out in 2024. The aim of the initiative is to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. 

Given a cashless society still seems many years, perhaps even decades away, your current business practices should remain largely unaffected. And indeed, handling cash is a rare occurrence when dealing with clients’ financial planning and accountancy needs. 

In addition, most advice firms charge ongoing fees on a percentage of client assets, taken directly from clients’ investment portfolios. 

However, there may be certain business expenses, such as fuel or stationery, that you wish to continue paying in cash on some occasions, so the news that physical notes and coins still have plenty of legs yet may be warmly welcomed. 

In summary, the key here is choice. Both you and your SME clients wish to ensure that people can pay for the services they want using the payment methods they prefer; within reason, of course. This is underscored by FCA research which found that 98% of small business owners said they would never turn customer away if they needed to pay using cash. 


About the author
Craig Rickman
Craig Rickman is senior content writer at He has been writing about personal finance and wealth management since 2016, including four years as a journalist at the Financial Times Group. Prior to this, Craig spent eight years working as a regulated financial adviser. He holds the CII level 4 Diploma in Financial Planning.

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