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Cost of living: people go back to cash as prices rise

LONDON — People are turning back to cash to more closely control spending as the cost of living soars, according to a new post office survey.

The Post Office processed £801m of personal cash withdrawals in July. This is the highest since records began five years ago.

This is an increase of more than 20% year-on-year.

Cash Action Group chairman Natalie Seaney said it shows that people are “literally counting pennies” as they grapple with rising prices.

“This is absolutely due to the cost of living crisis,” said Seaney, who chaired the government’s independent review of access to cash.

“People will take the cash out and actually put it in the pot and say, ‘This is for bills, this is for food, this is left over.'”

Prices are rising faster now than they have in 40 years.

The rising cost of living is putting pressure on people’s finances as their income cannot keep up.

In total, £3.32bn of cash was deposited at post office counters in July and £100m more withdrawn than in June.

Personal cash withdrawals were £801m, up almost 8% month-on-month and more than 20% year-on-year.

This is the highest amount since records began five years ago and the second time personal cash withdrawals have surpassed £800m. The last time he did it was in December 2021, and withdrawals are always increasing at that time of year, the post office said.

The post office has extra withdrawals in its 11,500 branches because more people are using cash to manage their weekly and often daily budgets.

He also said more people are opting for staycations, partly because a recent survey by the Post Office found that 71% of Britons planning to holiday in the UK this year said they would buy cash before leaving. I was going to pull out the

“More and more people are relying on cash as a tried and tested way to manage their budgets,” said Martin Carsley, the post office’s banking director.

“Whether it’s for a staycation in the UK or to prepare for the financial pressures expected in the fall, access to cash is critical for all communities.”

Cash deposits also increased, according to the survey.

Individuals deposited £1.35bn in cash in July, up 2% from the previous month. Meanwhile, business cash deposits totaled £1.13 billion, up 1.9% from the previous month.

Carsley said the numbers show Britain is “not a cashless society”.

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Sheeny told the BBC that given the rising cost of living, it’s easy to see why people are using more cash.

“Cash has been declining for more than a decade, and the pandemic has accelerated this, but it is now coming back due to the cost of living crisis.

“Using cash helps people budget because you can literally count your change. We all know that paying with a card makes it easy to spend money you don’t have and overspend.” .

“Even if you only have £30 a week to live on, holding it in bills and coins is the most effective way to budget and control your spending.”

University of Salford student Kira Hayward turned to social media for inspiration to combat rising costs by withdrawing cash from her bank account.

She puts it in variously labeled envelopes to secure money for food and bills.

“I went on Instagram and YouTube and saw these physical budget binders,” she told the BBC in May. Knowing that I have £80 for my personal purchases, I don’t think I can go beyond that.”

As more high street banks close their branches, Ceeley said post offices and shared banking services are needed to ensure people can get the cash they need.

“The reality is digital isn’t going to work for everyone,” she said.

“With millions of people without access to computers or smartphones, we need to keep our cash working.” — BBC

https://saudigazette.com.sa/article/623755/BUSINESS/Cost-of-living-People-turning-back-to-cash-as-prices-rise?ref=rss&format=simple&link=link Cost of living: people go back to cash as prices rise

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