Money talk: Preparing for a cashless future

With the continued move to a cashless society, here’s our guide to everything you need to know to prepare and thrive.

The UK is moving towards a cashless society, and it’s happening faster than you might think. I can count on one hand the number of times I’ve used an ATM this year. Railway ticket offices are closing, and car parks now seem to rely on apps for people to pay.

While this move to a cashless society has raised concerns, such as easy access to digital funds, especially for the 1.1 million unbanked individuals or those who aren’t technically literate, the benefits are undeniable.

For example, cashless payments are more convenient and secure. You can pay for your purchases with a tap of your card or phone, without having to fumble in your pocket or bag for change or notes. And, if your card is lost or stolen, you can easily block it and report it, often using a banking app on your phone which is both convenient and secure.

So, are you ready to go cashless?

Mature woman holding a credit card over her faceCredit: Shutterstock/JLco Julia Amaral

What is a cashless system?

No cash required

A cashless society is one in which physical money is not used in financial transactions. Instead, people and businesses transfer money to each other digitally, using electronic payments such as credit and debit cards, and services, such as PayPal.

It’s a trend that has been accelerated by the Covid pandemic, when fears of handling cash, and potentially transferring the virus, meant many businesses moved to card-only payments.

Since then, cash payments have returned but there are many benefits to a cashless society.

  • Convenience: Cashless payments are faster and more convenient than using cash. You can make payments with a tap of your card or phone, without having to count out money.
  • Security: Cashless transactions are a secure way to pay. Your credit or debit card information is protected by encryption, if you lose your debit card, you can cancel it and report it lost or stolen. If your cash is stolen or lost, it’s not retrievable.
  • Traceability: Cashless payments leave a digital trail, which can help law enforcement track down criminals.
  • Reduced fraud: Cashless payments can help to reduce fraud, as it is more difficult to counterfeit digital currency.

While there is a concern that those who are not tech savvy or do not have access to the technology required for cashless payments, may be at a disadvantage, there are steps that can be taken to address this. For example, businesses could offer cashless payment options that are accessible to everyone, such as accepting cheques.

Natalie Turner, Deputy Director for Localities at the Centre for Ageing Better, says both businesses and the Government need to ensure that everyone can operate within a cashless infrastructure.

“We believe that the onus should be on businesses, organisations, government and society more generally to help limit digital exclusion as much as possible, which will then help more people to embrace technology,” she tells Saga Exceptional.

“Reducing the cost of accessing digital services would help. We would welcome lower costs for digital devices and wider eligibility and greater publicity around the availability of for broadband. At present, only 3% of people eligible for social tariffs are accessing them.”

What are social tarrifs?

Put simply, social tarrifs are cheaper broadband and phone packages for those on certain benefits. These are available direct from providers for those people claiming Universal Credit, Pension Credit and some other benefits.

Overall, the move to a cashless society has the potential to create many benefits for people. By focusing on inclusivity and accessibility, we can ensure that everyone can enjoy the convenience and security of cashless payments.

Is the UK cashless?

Cash is still – almost – king

The UK is not yet a cashless society, but it is moving in that direction.

A report by UK Finance noted that the number of cash payments fell by 1.7% in 2021, used for 15% of all payments in the UK (the second most used method), while in the same year, a third of all payments in the UK were made using contactless methods. Compare this to Sweden, where in 2020, only 9% of all payments were made in cash, and you can see we’re not quite there yet.

The report concluded that while it expects cash usage to continue to fall, “the UK will transition to an economy where cash is less important than it once was but remains valued and preferred by many.”

The current cost of living crisis may also be delaying our move over to a cashless society. A recent report found that cash payments have risen for the first time in a decade, driven by the fact that using cash makes budgeting easier for many.

Shops can refuse to take cash even though it’s legal tender

While there are many businesses that still accept cash, it’s not a legal requirement. They are free to decline certain forms of payment, like either cash, or card.

Speaking on his own TV show back in 2020, money expert Martin Lewis said: “You are allowed to take card-only as long as it’s not discriminatory for race or disability or something.”

The Bank Of England also confirms this money myth, by stating on its website that “a shop owner can choose what payment they accept. If you want to pay for a pack of gum with a £50 note, it’s perfectly legal to turn you down”.

Legal tender actually relates to debt. While you have to pay someone you owe in legal tender, this can be in any means from cash to card.

How to thrive in a cashless society

Tips for navigating life without cash

While cash may always be in circulation in the UK, we are moving towards a digital-first society, so it is beneficial to embrace this as much as possible.

If you feel like you’re lacking confidence in this area, there are several steps you can take to improve your knowledge in our ever-growing cashless society. Overall, living within a cashless society is really just about making smart moves with your money and money management skills.

1. Educate yourself

Turner says there is an element of fear for some people when it comes to understanding how the digital world works.

She says: “They are concerned that they might break technological devices, do something ‘wrong’ that they can’t amend, or hold very legitimate concerns about privacy issues or being scammed.”

To offset that, Turner recommends taking up a digital skills programme, ideally one where the learning progresses at your own pace. She suggest that attending classes in person, as opposed to online, is a great idea as it puts new learners at ease.

“Such programmes could have greater reach and visibility if supported by the Government or large corporations,” she says.

“It is vital that these programmes emphasise the importance of the benefits of using digital services. It is also critical to break down the digital world – which can seem vast, unwelcoming and unnavigable to some – into more manageable bitesize elements.”

Even if you’re a confident tech user, the digital world is changing all the time, especially when it comes to things such as scams, so keep reading and learning. Sign up to specialist newsletters to receive up-to-date information sent directly to your inbox. I really like Which’s money newsletter or Money Supermarket’s weekly newsletter – both of which cover a variety of money-related issues.

Action Fraud UK is also a really valuable website which I recommend you bookmark. It lists all the current scams that have been reported to the organisation and you can also call its hotline on 0300 123 2040 to report a scam or get further help and advice.

Finding a course

Learn My Way is a website offering free online courses to develop digital skills and learn how to use the internet, while Good Things Foundation online centres offer skills training and digital access support in offline hubs. Age UK also offers courses in computer skills on its website – contact your local Age UK to see if there is a course near you.

Some banks, such as Lloyds, Barclays, Halifax and HSBC, are also offering customers online skills sessions. Contact your bank to find out if it offers something similar.

Public resources such as libraries often have courses or can help you get online using their computers if you don’t have the equipment or internet at home.

Previously I helped teach a group of over-65s basic computer skills, from how to send an email to registering for online banking at my local library, so it’s worth reaching out to see if yours offers anything similar. You could also contact your local council to find out if it runs digital courses.

2. Ask for help from family and friends

If you’re having trouble learning how to make digital payments, and don’t have access to a course nearby, ask a friend or family member who has more knowledge for help.

They can show you how to use your card, register for online banking and help you download any apps you might need to pay for things.

3. Start small

As with learning anything new, start small and go cashless with more familiar transactions first.

Pay for your groceries by tapping your contactless card. Pay your gas bill online, rather than over the phone. Order something online from one of the shops you visit regularly on the high street.

This approach allows you to gain confidence with everyday purchases before venturing towards more complex transactions.

4. Use a prepaid card

A prepaid card is a good option if you don’t have a bank account or want to keep an eye on your spending. If you travel a lot, these can also be a good alternative to taking a debit or credit card away with you, as they offer good exchange rates with no or low fees to spend or withdraw cash while you’re abroad.

Prepaid cards can be loaded with cash and then used to make payments. The money can be transferred from a bank account, or you can go to certain shops and give them cash, which they will load onto the card for you using a PayPoint service. You can also get your wages or other sources of income paid directly onto most prepaid cards.

Check out Money Saving Expert for its pick of the best prepaid cards.

5. Shop around

“There are financial barriers around using expensive devices to access digital services, while the cost of internet connections can also be prohibitive to some,” says Turner.

If it is the cost that’s preventing you from having a smartphone or internet at home, there are options that might make it more affordable.

There are some broadband providers, for example, who offer  social tariffs. These are cheaper broadband and phone packages for anyone claiming Universal Credit or Pension Credit, as well as other benefits. Despite being cheaper and usually not tying you into a contract, they’re delivered in the same way as normal broadband packages, just at a lower price.

If you’re looking for a laptop or a tablet, GetOnline@Home offers cheaper refurbished items to those in low-income households, who are disabled or in a community with limited access to technology. You can call 03719 100100 to get more information about whether you qualify for its scheme.

6. Find new ways to budget

If you’re on a budget, working with cash is always a failsafe way to keep on track, however, there are lots of tools out there that can help you manage your money, all without ever having to use any actual cash.

The online bank Monzo, winner of the Best Banking app at the British Bank Awards, offers lots of budgeting tools when you open an account with it. This includes offering virtual pots, where you can save cash, separate from your main account. You can also track your spending and set targets, all of which can help you keep to a budget.

I can personally vouch for this as it has helped me to improve my budgeting skills and, even though I never actually see the money, it feels rewarding keeping it in goal-orientated pots.

There are also apps available that are great for budgeting. Another award winner, Money Dashboard, allows you to connect your bank accounts, monitor spending and set budgets all from one handy app.

7. Keep physical records

While you probably won’t need them, it’s always wise to keep a paper copy of any important documentation. This can be handy in the unlikely event of a tech error.

I was advised by my financial adviser to keep statements and similar documents for at least six years, so I have a special file for these. I’ve not had cause to use them yet, but it does feel like a reassuring safety net.

8. And finally… Be patient with yourself

Adapting to a cashless society can take time. Be patient with yourself as you learn and practise using new technologies. As my work teaching digital skills showed me, the more you use them, the more confident you become.

I taught people who had never even used a computer before, eventually making Zoom calls with relatives in Australia, and switching to online banking. Try and incorporate your new skills into your everyday life and it will soon become second nature.

Jayne Cherrington-Cook

Written by Jayne Cherrington-Cook she/her


Jayne is the Senior Editor at Saga Exceptional. She cut her online journalism teeth 24 years ago in an era when a dialling tone and slow page load were standard. During this time, she’s written about a variety of subjects and is just at home road-testing TVs as she is interviewing TV stars. A diverse career has seen Jayne launch websites for popular magazines, collaborate with top brands, write regularly for major publications including Woman&Home, Yahoo! and The Daily Telegraph, create a podcast, and also write a tech column for Women’s Own.

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