An increasing number of Brits are hoarding physical cash, amid extreme economic uncertainty and the possibility of network outages.
Victoria Cleland, a chief cashier at the Bank of England said this week that UK households turned to cash during the pandemic and for budgeting in the subsequent cost of living crisis.
Polly, a 58-year-old, is one such person stashing cash at home. Having worked in banking previously she said she knows all too well how easily things can go wrong.
That’s why she keeps about £200 in banknotes for emergencies – some stuffed in her underwear drawer and the rest in a book.
Speaking to The i Paper, Polly, who now works in marketing and lives in London, said: “No system is 100 per cent reliable.
“Recent examples demonstrating our systems are vulnerable include cyber attacks on M&S, the Co-op, and Harrods.
“But there have also been numerous data breaches, banking issues, an electrical substation failure that took Heathrow Airport down, and power outages in Spain and Portugal.”
Certain people know where the cash is, she said, but she isn’t worried about losing it in unfortunate events like burglaries, house fires, or even misplacing it.
She added: “I advise people to have some cash – the amount that they can afford to lose. I can afford to lose what I have.
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“You could always check your insurance policy for its cash limits and provide some proof that you had the cash, albeit being actually difficult to prove.”
As of yet, Polly has never dipped into the cash, which she’s had there for a decade, and she said she will likely add to it at the rate of inflation.
It comes as the Bank of England revealed the rising number of British banknotes in circulation, suggesting households are in fact hoarding cash as they’re worried about the future.
Meanwhile, some like to keep a contingency pot amid the threat of payment networks being grounded.
It helps to explain why the number of notes in circulation has jumped by 23 per cent since before the pandemic at a time when the volume of cash transactions has “gone down significantly,” she said in a fireside chat at the Cash in the UK conference.
‘My father and grandfather always kept thousands hidden away for emergencies’
Emily, from the South of England, has grown up with her family doing a similar thing.
The 29-year-old said her father and her grandfather would have between £5,000 and £10,000 hidden away at any one time.
As far as she is aware, as they didn’t talk about it all that much, they did it throughout their lives as they believed it was less risky than having money in a bank.
Emily, who works in PR, said: “They didn’t want to be over reliant on one source. They thought it was better to have money spread around, including some in physical form in case you can’t get to the bank or access your money.”
Her 87-year-old grandfather, who was a salesman and now lives in Cyprus, keeps it under his bed.
He lives alone but he did tell his close family in case anything ever happened to him, she said.
Emily’s father, who was an engineer and was 63 when he passed away, kept it in a hidden safe away from the house – no one but him knew where it was.
She added: “He kept it a secret as I believe he wanted to treat it as an emergency fund that he didn’t need to worry anyone else with but would know it was there should an emergency happen, or he needed it to make a bigger purchase.
“With cyber-attacks becoming more commonplace and only set to increase, I feel it would be silly to be completely reliant on all money being digital.”
Emily said she plans to take the approach of her grandfather and father – having her money spread across bank accounts, investment pots, and some in cash for maximum security and peace of mind.
They both used numerous savings accounts, bought premium bonds, ISAs and other types of investments throughout their lifetimes.
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