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"Cash is not likely to die out any time soon" - according to the Bank of England

1,579 views · Published 2 December 2015 · 4:48 · Indexed 6 November 2026

Channel: The 2% Brief · 2015 · People & Blogs

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Today is Wednesday 2nd December 2015 and we are reporting briefly on the Bank of England’s announcement concerning the amount of Sterling Cash in circulation.

Many of our subscribers in recent weeks have either drawn our attention to, or raised the issue of, a ‘cashless society’ believing that this may be upon us very shortly. Whilst we have taken the view it will take at least 20 years to achieve this, it’s quite fortuitous that the Bank of England has today issued its Statement /Report on this very matter. 

These are basically the highlights:

• At least half of all UK banknotes in circulation are held  
        overseas or used in the black market. 
• Only about a quarter of cash in circulation is being used to 
        buy and sell things. 
• Some cash is being hoarded, outside of bank accounts
• Much is held for travel money overseas or used illegally in the 
        "shadow economy”.
• Latest figures show that some £62.6bn worth of bank notes 
        were estimated to be in circulation at the end of July.

According to the BBC, ‘recent industry figures showed that the number of cashless payments in the UK had overtaken the use of notes and coins for the first time. Card use, such as contactless payments, and digital transactions using smartphones are on the rise.’

Despite this, the value of banknotes in circulation has tripled over the last 20 years. The Bank of England added "Over the next few years, consumers are likely to use cash for a smaller proportion of the payments they make," …. "Even so, overall demand is likely to remain resilient. Cash is not likely to die out any time soon."

Some interesting statistics show:
• 48% of payments made by consumers, businesses and 
        financial firms were in cash
• 34% of consumer payments are expected to be in cash by    
        2024
• 4.4% of adults “rarely” use cash at all
• 1% of consumer payments were made by cheque in 2014

The Bank also pointed out that "People may choose to save their money in a safety deposit box, or under the mattress, or even buried in the garden, rather than placing it in a bank account,"…….

So from the horses mouth as it were;  a cash based society is to remain with us for some time to come, and an admission that people are saving their cash outside of the banking system either due to distrust of the banks or due to ‘black market activities’. 

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