Page last updated at 14:01 GMT, Thursday, 15 April 2010 15:01 UK

Cash use 'depends on geography'

Cash machine
Some people can find it easier to budget with cash

Consumers in different areas of the UK have differing levels of cash use, according to the Royal Mint.

Cash use as a proportion of spending is generally higher in northern regions than in areas such as London, said Andrew Mills, of the Mint.

He added that the "piggy bank factor" meant some people found it easier to budget with cash at a time of economic uncertainty.

The comments come after a report suggested the use of cash would fall.

Cash payments will account for less than half of all transactions in five years' time, according to research by the Payments Council.

The council, which oversees the strategy on payments systems, claimed that "cash is king no more" as card payments accelerate and notes, coin and cheque usage declines.

Coin demand

Demand for newly minted UK coins stood at 1.2 billion pieces in 2008-9, with a value of £163m. This figure has been relatively static for the past five years, and demand is expected to remain the same for the next year.

Mr Mills, director of circulating coin at the Royal Mint, said that although changing payment systems would affect the future of coins, they were still a key part of day-to-day use.

"I think that during my lifetime, there will always be a role for cash and coinage," he said.

But he said that, at present, there were marked regional and socio-economic differences in the use of cash.

In London, where cashless options such as the Oyster travel card were prevalent, the use of cash was lower than in areas further north.

He said there was a strong historical link to coinage, with the Mint having existed for 1,000 years.

As well as general coinage, and commemorative editions, the Royal Mint produces coins for 60 countries from its base in South Wales.

Some 20% of its production of five billion coins is for the UK.

Importance

Earlier in the week, the Payments Council published a report giving its vision of the future of how UK consumers spend.

It suggested that by 2018, one in 50 people would be paid their wages in cash, compared with one in eight in 1999.

It predicted that cash would account for 45% of transactions by 2018, compared with 73% in 1999, whereas debit card spending would increase from £65bn to £490bn over the same period.

It has set a potential deadline of 2018 for the end of the cheque system.

Meanwhile, a poll by the Bacs automated payments service suggested that the risk of incorrect or fraudulent transactions going undetected had increased because people did not check their accounts regularly.

The survey findings suggested that the number of adults who regularly checked their bank statements had dropped by 13% since 2007, to 71%.

Bacs statistics also revealed that only 70% of British adults know when their bills were due to be paid, a drop of 10% in just two years, increasing the risk of late payments and penalty fees.

"Standard banking guidelines stress that people should regularly check their bank statements and make sure there are no unusual or unexpected payments from their accounts," said Michael Chambers, managing director of Bacs.



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