Cash at the Crossroads: Determinants of Use and Policy Challenges in the United Kingdom

Rachel Ennis () and Daniel Bogiatzis-Gibbons ()
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Rachel Ennis: Financial Conduct Authority
Daniel Bogiatzis-Gibbons: Financial Conduct Authority

Journal of Consumer Policy, 2025, vol. 48, issue 2, No 4, 165-195

Abstract: Abstract While policies to address the digital divide often focus on improving internet digital skills, it is also crucial to ensure people can access essential physical services they still require. This study investigates the case of ongoing cash reliance in the United Kingdom in the context of declining cash usage and, accordingly, the provision of ATMs and bank branches. Utilising data from the Financial Lives 2022 survey, a large, nationally representative dataset, this research employs a logistic regression model to analyse the association between demographic characteristics and cash reliance. The findings reveal that digital exclusion, driven by low digital skills, is the strongest predictor of cash reliance, increasing the likelihood by four times. Those living in low-income households or that are unemployed also exhibit significantly higher reliance on cash, emphasising the need for equitable access. Other important factors include residing in Northern Ireland or Scotland and poor health. These geographic and socioeconomic disparities highlight the need for regionally nuanced policies to ensure adequate provision of cash access services. Interestingly, while older age is associated with cash reliance in some studies, its impact is nuanced here, becoming statistically significant and positive only when broader cash usage, rather than reliance, is considered. The model has moderately strong predictive power (as measured by McFadden’s pseudo-R-squared and confirmed by cross-validated AUC), confirming the importance of the identified predictors for policy design, although it is unsuitable for precise small-area estimation. This suggests a holistic approach incorporating these predictors alongside a broader range of local area characteristics should be adopted when evaluating the risks associated with declining cash access services and ensuring equitable access to them.

Keywords: Financial inclusion; Payments policy; Digital policy; Vulnerability; Cash usage (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10603-025-09591-4

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