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Cash accounted for just 8% of UK payments in 2025, down from 58% in 2009, yet the value of banknotes on the Bank of England's balance sheet rose from £50 billion to £99 billion. The Bank says £94 billion is held by the public in Britain and overseas. The figures are nominal, and overseas holdings are not household cash in Britain, but the contrast remains: people use cash less often while continuing to hold it.
Why it matters
Cash provides a backup when digital payments fail. A phone needs power, networks need to function, and payment institutions need to approve transactions. Notes in hand can be passed directly to a seller without those systems, offering a practical alternative during an outage. Cash payments can also avoid creating the same bank transaction record as card payments, a form of everyday financial privacy.
The Netherlands' National Forum on the Payment System recommends preparing for three days of disrupted electronic payments. Its benchmark is €70 per adult and €30 per child for essentials, with households advised to adapt the amount to their circumstances. That guidance reflects cash's value as contingency, not a replacement for digital payments.
Market impact
Research cited by the European Central Bank records increased demand for cash during the 2008 financial crisis, Greece's sovereign debt crisis, the pandemic and the war in Ukraine. Cash use also rose after the April 2025 blackout in Spain and Portugal, when digital payment infrastructure failed. It cannot restore power or keep a shop open, but it can remove one dependency from a transaction.
The distinction matters for financial resilience: cash helps with access to spending during disruptions, while gold addresses a different concern, exposure to a currency's purchasing power. Maintaining cash as a usable backup also depends on withdrawal access, merchant acceptance and the systems that keep notes in circulation.
Frequently asked questions
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How did UK cash use change between 2009 and 2025?
Cash accounted for 58% of UK payments in 2009 and just 8% in 2025.
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Why did the value of UK banknotes rise as cash payments fell?
The figures show that people used cash less often for payments while the value of banknotes on the Bank of England's balance sheet rose. The story frames cash as a backup people still want to hold.
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What cash reserve does the Netherlands recommend for payment disruptions?
The National Forum on the Payment System uses a local benchmark of €70 per adult and €30 per child for essentials during three days of disrupted electronic payments.
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What happened to cash demand during the 2025 Spain and Portugal blackout?
The European Central Bank said cash use increased after the April 2025 blackout, when digital payment infrastructure failed.
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How does cash differ from gold as a form of financial resilience?
Cash can help people make payments when electronic systems fail. Gold addresses exposure to a currency's purchasing power, but carries market risk and other trade-offs.
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