With the cash-killing combo of the UK recently increasing its contactless limit to £45, alongside the governments initial insistence that cash increased the spread of covid, you might be forgiven if you expected that the past couple of years has led to a big decrease in cash and the expectation of many is that we are at the end of cash.

However official statistics from the Bank of England shows quote the opposite. Infact if we look at data, we can see that the total value of banknotes has only increased, year on year, at least since 1975. The chart below shows the total value of all banknotes in circulation for each of the past 51 years.

As you can see, the total value of today’s banknotes in circulation dwarfs those of previous decades. 2018 was the only year in the past half century that didn’t increase, but it practically stayed the same as it was less than 1% lower than the previous year. And what might be most shocking of all is that the largest increase in a single year was in fact 2021, increasing by a whopping 10 billion pound or 12.5%. As we can see this level of increase in value in a single year is unprecedented, with the second largest increase in 2017 of just over £5 billion and the rest averaging even less.

In the chart above, if we zoom in to the past 25 years, we can see that the total quantity of cash in circulation has actually quadrupled, from ~£20 billion to ~£80 billion. This is a 400% increase of the quantity of notes in the UK! Quite the opposite of what we are led to believe with the rise of digital, contactless and online payments seemingly pushing cash into the abyss. The data really contradicts the perception a large proportion of the public hold, that cash is on its way to being consigned to the history books, alongside men’s jumpsuits from the 1970’s and the dodo.

The increase over the past 25 years has actually been a steady rise of around 7-10% in most years, with a short levelling out period from 2017-2020, coinciding with the release of the plastic banknotes, which may or may not have been a factor in the quantity during these few years. However, with 2021 having the sharpest increase since at least 1975, the increases are back on track to align with where it would be had it followed its previous trajectory.

While the percentage of transactions made with cash has decreased over the past two decades, the volume of physical currency in the UK has increased exponentially to never-before-seen levels. You may speculate about the role of cash in society changing, but it certainly isn’t on its way out anytime soon and the Bank of England certainly has faith in its longevity, with what must be a huge investment in the new physical plastic cash stocks.

Cash has been around for millennia in some form or another, and with the increasing investment in cash by the Bank of England, we think the focus should be more of what role cash might play in the future, rather than whether it might exist at all.