This week saw another milestone reached in the journey towards a cashless UK with news that consumers now spend more money on credit cards alone than they do in hard cash. 

While that may say quite a lot about our debt crisis, it’s also another nail in the cash coffin. 

Physical money now forms just £1 in every £5 spent with UK retailers, according to data from the British Retail Consortium.

But does it really matter? And who to?

13 billion

The not-so-gradual demise of cash is well documented. UK Finance, the trade body that represents the banking and finance industry, calculates that in 2007 more than 60 per cent of all transactions were in cash. 

Just 10 years later the figure was down to 34 per cent – the same year that debit card transactions took over as our preferred method of payment for the first time. 

By 2027, cash will account for barely one in every 10 transactions. 

But the chances of us being completely cashless anytime soon remains unlikely. At least, the 1.3 million people in the UK who still don’t have a bank account must hope so, along with the 2.2 million people who rely on cash for their everyday spending. That’s 4 per cent of the adult population.

Even last year, 13 billion transactions were still made in cash, according to Sarah John, chief cashier for the Bank of England. 

“Those most reliant on cash tend to be from lower household incomes, with over half having total household incomes of less than £10,000 per year,” she added. 

“The tangibility of cash is a key benefit, allowing them to physically calculate and budget their spending. Digital payments do not yet work for everyone. 

“Technological advances in payments have the power to support financial inclusion. But they currently tend to be designed for the mass market rather than for vulnerable groups, meaning vulnerable groups are rarely early adopters of new payment offerings.”

Paying for the privilege

And yet consumer group Which? this week revealed that deprived areas are losing free cash machines at a much faster rate than affluent ones, forcing thousands of people in poorer communities to pay up to £2 per withdrawal to use the growing number of pay-to-use machines now quickly replacing the free ones.

Which? analysis of data from Link – the UK’s biggest ATM network – shows one in 10 free cashpoints across the country closed or switched to a fee-paying one in a 17-month period after major changes to how the network is funded.

Cost in the community

Among the hardest hit are Birmingham’s Ladywood constituency, where 47 free machines closed in less than a year and a half, followed by Bristol West, Manchester Central, Belfast South and Cardiff Central – all constituencies with a large proportion of deprived areas whose residents are most likely to rely on cash.

While some communities in cities and towns can lose a few cashpoints and still have a reasonable level of access to free-to-use ATMs, people in less well-served and rural areas that have seen a spike in the percentage of fee-paying machines are more likely to be left with no option but to pay to withdraw cash.

In Great Yarmouth, for example, half the cash machines will now charge up to £2 to allow residents and visitors access to their own money. It’s a similar situation in Vauxhall in London, and Blaenau Gwent.

Overall, Which? found that the most deprived areas across the UK saw a reduction of 979 free-to-use machines in that 17-month period alone – equivalent to 6 per cent of their ATM network.

Which?, along with the Independent Access to Cash Review, has this week called on chancellor Sajid Javid to take action to guarantee people’s ability to access and pay with cash as digital payments grow in popularity.

The consumer group is concerned that measures put in place by Link and the banking industry to help those in deprived or isolated areas just won’t do the job adequately enough long-term.

Which? believes the Payment Systems Regulator must urgently take control of how cashpoints are funded to address the rapid reduction in free cash access across the UK. 

The regulator must ensure those still reliant on cash aren’t forced to pay because of the double blow of bank branch and cashpoint closures and an alarming shift to fee-charging machines, Which? warns. “A year ago, leaders in Sweden – the most cashless society in the world – warned us to act now to stop the UK sleepwalking into a cashless society,” said Natalie Ceeney, the independent chair of the Access to Cash Review. 

“Six months ago, we presented recommendations of what steps should be taken to make sure no one was left behind. With ATM numbers declining, cash use dropping, and more and more shops not accepting cash, our fear is that the UK will fast go cashless, leaving millions of people behind.”

The signs that colder weather is coming are all around us. Leaves are starting to fall, The Apprentice is back on, and spiders the size of saucepans are scuttling around our homes. All those things should be a warning that it’s time to check your home is ready for winter and that your home insurance is ready too. That way, if the cold or the storms do cause damage to your property, you can have confidence that you’re covered.

So, with Storm Lorenzo behind us but the next one likely to hit soon, what do you need to know to be sure you are protected? Here are the common pitfalls that could cause problems.

Not telling your insurer about building work

We often start thinking about building work at this time of year so that extension or improvement is ready for Christmas. But it’s important to let your insurer know because otherwise they may not be willing to provide cover during the works.

Leaving your home empty

It may be unusual to holiday for a lengthy period but if you are planning a long break to get some sun this autumn and winter then make sure your insurer is comfortable with your home being left empty.

Some specify that the property should not be left for longer than 30 days but others have a shorter period.

Renting a room

If you’re starting shopping for December then now may be a time you start to look for some extra sources of income. Some people choose to rent a spare room in their home to a lodger, with the government allowing up to £7,500 a year to be earned in rent before any tax becomes due.

Before you sign up a lodger make sure you check your home insurer is okay with that.

Inviting another person to live in your home may have an impact on the risk you present to your insurer. So doing it without their permission could invalidate your cover.

Underinsuring yourself

One thing it is really important to understand about home insurance is how problematic underinsuring can be.

If you have undervalued the cost of rebuilding your home or you have undervalued the contents, you could find yourself stuck if the bad weather leaves you making a claim.

For example, if your home’s contents are worth £40,000 but you have told your insurer they are worth £20,000, that doesn’t mean you would get up to £20,000 if you made a claim.

In fact, many insurers would say that you did not give them the full information and might cap your claim at a lower amount to reflect that or even refuse it entirely.

Now is a good time to go from room to room pricing up the contents realistically and ensuring your policy meets them.

The more accurate you can be, the better – if you overinsure then you are paying for more cover than you need.

Accidentally misleading the insurer

If you have told your insurer that you have a certain kind of lock or a security feature such as a powerful alarm then you need to let them know if that changes.

They have determined your risk based on the security extras you have in your home, so if anything changes then you need to let them know to avoid the worry of wondering whether your policy will still protect you.

Avoid paying the excess by doing some maintenance

New homeowners soon discover that houses can be money pits and it can be tempting to skimp on the maintenance. A recent survey by Aviva found that more than a quarter of homeowners admit ignoring minor faults until they become more serious.

Well, winter is the time that many faults do become more serious and prevention is better than a cure.

Taking some time to check and repair your home makes sense, before it gets too cold to do the outside jobs.

Aviva suggests checking the roof for missing or damaged tiles and slates, as water damage from rain can be significant. While you’re at it, clearing the gutters and drains will also allow water to drain freely.

The comparison website for tradespeople HaMuch.com says that getting a professional to clear debris costs around £5 a metre, but if you leave it so long it causes damage, it can cost £30 a metre to replace gutters.

Call out a chimney sweep. Unswept chimneys pose a greater fire risk, so as the weather gets colder, get it swept before you light your fire or stove.

You may not have a fire but everyone has a boiler and now is the time to get it serviced so it’s ready for the cold. This is not the time of year to go without a boiler.

Now is the time to repair or secure wobbly fences and broken gates so they don’t come apart in windy or stormy weather.

Check the taps and repair any that drip, particularly outside. It’s also a good idea to insulate outside taps.