(CTN News) – Post Offices witnessed a historic surge in personal cash withdrawals, reaching a peak on Friday, December 22. The reported amount totaled £62 million, surpassing the previous year’s record of £51.5 million withdrawn over the counter on Friday, December 23.
This upswing in cash transactions was attributed to the frantic last-minute holiday shopping and the tradition of preparing cash gifts for Christmas day.
The Post Office highlighted the significance of cash during the ongoing cost of living crisis, emphasizing its role in aiding individuals with day-to-day budgeting.
Christmas Day Cash Transactions: A Snapshot of Financial Activity
On Christmas day itself, personal account holders withdrew £800,000 in cash, while deposits from the same group exceeded a million pounds.
Concurrently, business customers deposited just over £1 million over the counter, underscoring the necessity for accessible and convenient deposit options for establishments, particularly during the holiday season.
Ross Borkett, Head of Banking at the Post Office, acknowledged the diverse reasons for cash withdrawals, stating, “For some people, being able to withdraw cash for free helped them to finish last-minute shopping for the big day, for others, it may have been a last-minute gift.”
The Link network, the UK’s largest cash machine network, reported that the last Friday before Christmas marked the busiest day of the year for cash withdrawals.
This day, which also served as the last working day before a four-day break for many, saw around £460 million withdrawn, with an average withdrawal value of just under £105.
Graham Mott, Link’s Strategy Director, attributed this surge to people stocking up for the Christmas weekend and using cash as a popular gift choice.
Cash Resurgence Amidst Bank Branch Closures: Post Office’s Crucial Role and Broader Trends
The Post Office, handling approximately £3.3 billion in cash every month, revealed an ongoing trend of increased personal cash withdrawals in November.
As communities faced bank branch closures, the Post Office played a crucial role in providing cash services, especially for leisure and hospitality businesses that rely on its branches for depositing cash.
The resurgence of cash usage has been noted in the broader context, with retailers reporting a rise in cash transactions.
The British Retail Consortium observed a growth from 15% to 19% in purchases made with notes and coins last year, driven by consumers closely monitoring their budgets amidst rising prices.
Similarly, UK Finance reported the first increase in cash use in a decade, attributing it to the financial impact of inflation.
While anticipating a decline in cash use in the future, regulatory efforts are being proposed to ensure continued access to cash, with the UK’s financial watchdog suggesting rules for maintaining free withdrawals and deposits within specified distances for urban and rural areas.