As the UK bid a fond farewell to its round onepound coin last month and our trusty paper bank notes are steadily being replaced by shiny plastic counterparts, at Explore Wealth Management, we started thinking about change and about how even something as fundamental as the currency we use isn't immune to evolution.
With advances in technology making it quicker and easier than ever before for people to access their money and make transactions, could cash soon become a thing of the past? Earlier this year, the UK Cards Association revealed that 77 per cent of all retail sales in 2016 were paid for with a credit or debit card, with contactless card payments accounting for almost a third of these.
Online sales also increased by 164 per cent with over 50 per cent being made via mobile phone. So, what is the impact of all this? At present, Britain has £63 billion of cash in circulation, however, economists predict that we could be a cashless society in 10 years’ time. There are a number of benefits to going cashless, for both businesses and individuals, all of which in some way help to stimulate the economy, which is exactly what the Government wants as it plans ahead for the next economic downturn. The Government’s preferred option is to see interest rates reduced to “negative rates” where it actually costs people to keep money on deposit. This creates a scenario where it is less beneficial to have savings in a bank account and instead, encourages people to either spend their money and therefore help the economy, or consider alternative methods of saving such as the stock market, which would again aid economic recovery and also serve to improve the value of pension savings and boost house prices. If you’re wondering how a move towards a cashless society might affect your finances, call the team at Explore Wealth Management on 0191 285 1555 for a free, no-obligation consultation where we can use the latest cashflow forecasting tools to help you plan ahead for the future.
For more information, visit www.explorewealth.co.uk
