Cash Amid Uncertainty Is a Safe Haven

Under the Mattress: Why Britons Are Stockpiling Cash Amid Global Uncertainty

In an age of digital wallets and contactless payments, a surprising trend is re-emerging across Britain. Households are increasingly choosing to hold on to physical cash, creating personal stockpiles as a buffer against growing economic and technological anxieties. This revival of tangible money, a practice reminiscent of previous crises, signals a deeper unease about the stability of global finances and the resilience of the digital systems that underpin modern life.

There has been a notable uptick in the volume of physical currency flowing through the economy, a trend that persists even as the number of purchases made with currency continues its long-term decline. This divergence highlights a fundamental shift in the role of cash. No longer just a medium for daily exchange, it is reasserting its age-old function as a store of value and a tangible asset in turbulent times. For many, the crisp feel of a banknote offers a sense of security that a digital balance simply cannot replicate.

Cash Surge Amidst Global Uncertainty

UK households are actively building contingency funds with physical money. A landscape of increased global volatility following the global health crisis, the conflict in Ukraine, and trade uncertainties are key drivers for this behaviour. People are seeking a reliable buffer, a dependable fallback for when the complex, interconnected systems we rely on falter. The instinct to have a tangible store of wealth kept at home is a direct response to a world that feels increasingly unpredictable.

This stockpiling is not merely an anecdotal observation. Paper currency's total value has surged 23 percent compared to pre-pandemic levels. This has occurred despite a dramatic decline in currency-based payments for everyday purchases. Physical money was part of only 12 percent of all transactions by 2023, a collapse from just over half a decade earlier. Yet, simultaneously, major financial institutions report a strong and growing number of client requests for physical currency.

The Psychology of Hoarding

The move towards hoarding cash is deeply rooted in human psychology. During periods of high stress and uncertainty, people naturally gravitate towards tangible assets that provide a sense of control. Financial anxiety, fuelled by experiences of economic instability, can lead individuals to accumulate money as a protective buffer against future hardships. The act of physically holding wealth offers a concrete way to manage feelings of vulnerability in a world that can often feel chaotic and unpredictable.

This behaviour is not new. Historically, from the Great Depression to the 2008 financial crisis, populations have resorted to using physical currency when their confidence in established systems wavers. The current climate of geopolitical tension, economic instability, and the lingering effects of a global pandemic has created a perfect storm for such anxieties to resurface. The impulse to hoard is a rational response to perceived threats, an attempt to build a personal fortress against potential financial storms.

Furthermore, the physical nature of cash can foster a greater awareness of spending. Research has shown that parting with physical money creates a stronger emotional connection to the transaction than simply tapping a card or a phone. This "pain of payment" can encourage more mindful spending and budgeting, a crucial tool for households navigating the current period of rising expenses. The tactile experience of handling money reinforces its value in a way that abstract digital numbers on a screen cannot.

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The Cost of Living and Budgeting

The ongoing era of high consumer prices has played a significant role in the resurgence of cash. With inflation reaching historic highs, many households found their disposable income squeezed. In response, a growing number of people have turned to physical money as a practical tool for budgeting. Using a fixed amount of cash for weekly expenses can make it easier to track spending and avoid the temptation of overdrawing on digital accounts.

Withdrawals from money machines grew by ten percent in 2024 compared to the previous year, with many customers explicitly using physical money as a tool for weekly budgeting when prices were soaring. This return to traditional budgeting methods reflects a desire for simplicity and control in a complex financial environment. For those on tight budgets, the finality of a cash transaction can be a powerful deterrent against impulsive or unnecessary purchases.

The recent period of intense price changes has fundamentally altered household financial behaviour, turning a nation of spenders into savers. While real household disposable income has fallen, consumption has fallen even further, indicating a notable rise in precautionary saving. For many, this saving takes the form of physical cash, a readily accessible emergency fund for unexpected expenses.

Fragility of the Digital Age

While the convenience of digital payments is undeniable, recent events have exposed the fragility of the systems that support them. High-profile banking outages and the ever-present threat of cyber-attacks have eroded public confidence in digital payments. In late April, for instance, a major electricity failure across Spain and Portugal disabled banking infrastructures, compelling consumers to resort to using currency for essential purchases.

Within the UK, a series of IT failures at major banks has left millions of customers unable to access their accounts or make payments, sometimes for extended periods. Between January 2023 and February 2025, there were at least 158 documented banking IT failures, highlighting systemic vulnerabilities. These incidents, often caused by issues with third-party suppliers or internal software glitches, serve as a stark reminder that digital convenience comes with inherent risks.

The European Central Bank also experienced a major disruption to its payment system in February 2025, a hardware defect that left trillions of euros in limbo for hours and delayed critical payments across the continent. Such events, though rare, have a significant psychological impact, reinforcing the appeal of a payment method that operates independently of complex technological infrastructure. Circumstances will certainly arise where digital networks fail and physical money is the sole payment option.

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The Threat of Cybercrime

The increasing sophistication of cybercrime presents another significant threat to the digital financial ecosystem. Phishing scams, malware, and identity theft are becoming more prevalent, causing devastating financial losses for individuals and eroding trust in online banking. Cybercriminals constantly adapt their tactics, exploiting weaknesses in digital payment systems and using advanced technologies like artificial intelligence to deceive both consumers and the software designed to protect them.

The potential for hackers to gain access to the databases of banks, retailers, and payment providers puts sensitive customer data at constant risk. While financial institutions invest heavily in cybersecurity, the perception of risk among the public remains high. For some, the only way to completely mitigate this risk is to keep a portion of their wealth offline, in the form of physical cash. This is not just a matter of personal preference but a calculated risk management strategy.

The growing unease about the security of digital transactions is reflected in consumer behaviour. A recent survey revealed that for some, concerns over the security of digital payments are a key reason for continuing to use cash. The fear of fraud and the desire for privacy are powerful motivators, driving a segment of the population to resist the complete transition to a cashless society.

A Declining But Resilient Payment Method

The journey of cash over the past few decades has been one of gradual decline. In 2014, its position as the primary method of payment began to slip, and by the year 2017, payments with debit cards had exceeded currency in frequency. The pandemic accelerated this trend, with health concerns and lockdowns pushing more consumers and businesses towards contactless options.

However, the narrative of a linear progression towards a cashless society is being challenged. The trend of declining currency use started to shift again in 2022, coinciding with a sharp rise in inflation. This reversal suggests that in times of economic stress, the unique attributes of cash—its tangibility, its role as a budgeting tool, and its independence from digital infrastructure—become more valuable.

Despite the overall decline, cash remains the second most popular payment method within Britain, after debit cards. While 22.1 million consumers used cash infrequently in 2023, 1.5 million people still relied on it for most of their day-to-day spending, an increase from the previous year. This highlights the continued importance of cash for a significant minority of the population, particularly those on limited incomes or with less access to digital services.

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The "Cash Paradox"

The current situation presents what has been termed the "cash paradox": transactional use is falling, yet the overall demand for banknotes is rising. This phenomenon reveals the dual role of physical currency in the modern economy. While its utility at the point of sale may be diminishing, its importance as a store of value and a safe-haven asset is growing.

Only a fraction of the cash put into circulation is used for buying and selling things. The remainder is held in reserve, either domestically or overseas, or used in the shadow economy. This growing "cash gap" between the amount needed for commerce and the amount being hoarded suggests a deep-seated lack of confidence in formal financial services among a portion of the population.

This paradox is not unique to the UK. Central banks in other digitally advanced countries, such as Sweden, are also re-evaluating the role of cash, warning of the importance of maintaining physical currency for resilience reasons. The recognition is dawning that a completely cashless society may be a brittle one, vulnerable to a range of technological and economic shocks.

The Access to Cash Debate

The declining use of physical money for transactions has led to a reduction in the UK's cash infrastructure. Bank branches and free-to-use ATMs have been closing at an alarming rate, making it more difficult for people to access physical money. This has sparked a vigorous debate about the need to protect access to cash, particularly for vulnerable groups who rely on it most.

Activists and elected officials have voiced concerns that the move towards a cashless society risks creating a two-tier system, excluding those who are older, on lower incomes, or live in rural areas with poor digital connectivity. When numerous stores decline to take paper money and coinage, it has prompted calls for legislation that would compel merchants to take it, ensuring that it remains a viable payment option for everyone.

In response to these concerns, the UK government has taken steps to protect cash access. New powers now exist to ensure the reasonable provision of cash withdrawal and deposit services. New rules, which came into effect in September 2024, require financial institutions to assess the impact of closures on local communities and to plug any gaps that are identified.

The Future of Physical Money

The government's commitment to protecting access to cash, combined with the public's renewed appreciation for its capacity as a safeguard, suggests that physical money will remain a feature of the UK's financial landscape for the foreseeable future. While digital payments will undoubtedly continue to dominate, the demand for a tangible, reliable alternative is unlikely to disappear.

The experience of the last few years has served as a powerful reminder of the limitations of a purely digital system. The convenience of tapping a card is undeniable, but it is a convenience that depends on a complex and fragile web of technology, power grids, and international stability. When that web is threatened, the simple, offline utility of cash becomes invaluable.

Ultimately, the hoarding of cash is a vote of no confidence in the prevailing economic and technological order. It is a quiet rebellion against an increasingly abstract and intangible financial world. For millions of Britons, the security of having a physical store of value is a comfort that no digital app can provide. In an uncertain world, the enduring appeal of the banknote speaks volumes. It is a tangible anchor in a sea of digital flux.