Public Should Hold on to Cash in Case of Cyber Attacks or Power Outages: Treasury Committee

MPs warned there was a risk of a ’two-tier society' forming if cash acceptance is not monitored, adding that it may have to be mandated.

File photo of a view of £5, £10, £20, and £50 banknotes dated Aug. 20, 2024. Gareth Fuller/PA Wire

The public should be advised to keep cash on hand in case of cyber attacks or system outages, MPs have told the Treasury.

Members of the Treasury Committee told the department on Wednesday that in discharging its responsibility for national security and resilience, it “must consider the value of physical cash in emergency preparedness.”

MPs continued, “This may include recommending that cash is held by individuals in case of emergency, and considering what role cash distribution might play in a severe payment systems outage.”

The committee cited the National Risk Register which notes that the UK’s financial systems are vulnerable to risks, specifically a “malicious cyberattack by a state actor” or “non-malicious technological failure.”

They concluded that owing to these risks and other potential failures in a retail bank’s digital supply chain, “physical cash has a vital role to play as a payment method that is independent, that is backed by the UK government, and that can be used as an analogue payment method when digital ones fail.”

National Resilience

The recommendations form part of a report into cash acceptance in the UK, amid recent trends showing a major decline in the use of physical currency.

UK Finance, a financial services lobby group, has highlighted that cash was used for 51 percent of all payments in 2013, falling to 12 percent in 2023, as a result of people increasingly preferring card and digital payments.

The committee also considered international examples where governments have assessed the role of cash.

MPs cited Sweden, which was explicitly planning to minimise physical cash and move towards a more cashless society. But the Scandinavian country reversed that decision, in part because of the importance of cash for civil resilience.

In November 2024, Sweden issued in its emergency guidance in case of war that Swedes should maintain a variety of payment methods at their disposal, including having enough cash to cover at least one week’s worth of expenses.

Norway and Finland have similarly advised their citizens to keep a store of cash in case of power cuts or other system failures.

In an interview with The Epoch Times earlier this year, Andy Farnell, director of research and education at Boudica Cybersecurity, emphasised the importance of keeping enough cash in circulation and use. He noted that in the event of a cyberattack or system failure, cash plays a crucial role in preserving civil stability because it operates independently of power or digital infrastructure.

Farnell explained that cash can help sustain public confidence during the critical two- to five-day window following a disruption, such as a system outage.

“The ability to self-manage trade through formal or informal cash is vital for civil order,” he said.

A branch of Lloyds Bank in the City of London, England, on Oct. 20, 2014. Stefan Rousseau/PA Wire

Mandating Cash

The Treasury Committee also warned that there was a risk of a “two-tier society” forming if cash acceptance declines.

The committee said it spoke to several charities representing vulnerable groups—such as the elderly, those with learning disabilities, and survivors of economic abuse—who rely on cash and whose lives are impacted when cash is refused as a payment method.

Charities also told MPs that local government is increasingly becoming cashless, including at council-run car parks and leisure centres.

Witnesses had highlighted public transport is also a space where cash acceptance has become less common.

The report said, “There may come a time in the future where it becomes necessary for HM Treasury to mandate cash acceptance if appropriate safeguards have not been implemented for those who need physical cash, and the level of cash acceptance begins to lead to widespread detriment.”

‘Sleepwalking’ Into a Cashless Society

Treasury Committee Chairwoman Dame Meg Hillier MP said that the government was “in the dark” on how widely cash is being accepted, with the committee calling for cash acceptance levels to be formally monitored.

“We are at risk of a two-tier society where the most vulnerable bear the brunt and this needs to be a wakeup call,” Hillier said.

She added: “As a society, we must avoid sleepwalking into a situation where cash is no longer widely accepted. This is the beginning, not the end, of our scrutiny of this issue. The Government needs to take this seriously.”

Responding to the report, a Treasury spokesperson said: “Cash continues to be used by millions of people across the UK and we are working with the banks to roll out 350 hubs by the end of this Parliament so that people and businesses in areas that have lost local bank branches still have access to it.

“We welcome businesses who do want to continue accepting cash and new rules introduced by the Financial Conduct Authority support this by helping them to make deposits.”

PA Media contributed to this report.