Cash use slumps to ‘all-time low’ as mobile payments now used half of Brits

Cash accounted for just 9 per cent of payments in 2024, plummeting from 48 per cent since 2014.

A new report, by a finance industry body, said that the phone, watch, and other mobile purchases have gone up to 57 per cent in 2024 (up from 48 per cent in 2023).

The report said: “In terms of the total population, 50 per cent were using mobile contactless payments at least once a month in 2024. It is the first time that regular mobile payment users reached half of the adult population in the UK.”

Younger people are leading the way in this adoption, but there is already significant use among older age groups, the UK Payment Markets 2025 report said.

Read More: Government tax increases ‘sucking cash’ out of pubs, warns Shepherd Neame

Read More: All household bills set to rise in April and what you need to know to save cash

It said: “Similar to most new technological innovations, UK Finance market research found that younger people are more likely than older people to use mobile payment services such as Apple Pay or Google Pay.

“We expect that, over the next decade, older age groups will start to catch up with younger cohorts in terms of adoption of mobile payments, a pattern that is regularly seen following the introduction of new payment services and technologies.

“This pattern was observed with contactless card payments and we are likely to see it with mobile payments too.”

The total number of payments made in the UK last year was 48.8 billion, up by 1.9 per cent from 2023.

Consumers were responsible for 84 per cent of payments last year, while businesses, government and not-for-profit organisations accounted for 16 per cent – including salary, pension and benefit payments to people and payments between organisations.

UK Finance said that, in a similar way to how contactless payments have replaced some low-value payments in physical cash, contactless mobile payments appear to be replacing contactless payments initiated using a physical card.

Nearly a third (30 per cent) of UK adults were living “largely cashless lives” in 2024, the report said.

Around 16.9 million adults used cash once a month or less last year, while 1.2 million mainly used cash, UK Finance said.

Nearly a fifth (19 per cent) of people aged 65-plus rarely used cash (using it once a month or less frequently), compared with 40 per cent of 16 to 24-year-olds.

The report said that while age is “the most accurate predictor” of cash use, data suggests people on high incomes are more likely to rarely use cash than people on lower incomes.

It added: “Among those who had a yearly income of £65,000 or more, 46 per cent rarely used cash in 2024, whereas among those who earn £20,000 or less a year, the share of rare cash users was 22 per cent.

“There is also a gender gap in cash use as women (33 per cent) are more likely to be rare cash users than men (26 per cent).”

Back in 2023, 1.5 million people mainly used cash for their everyday spending, as households finely balanced their budgets during the cost-of-living squeeze.

Here are the proportions of each age group registered to use mobile payments in 2024, according to UK Finance:

16 to 24 – 88%

25 to 34 – 78%

35 to 44 – 65%

45 to 54 – 58%

55 to 64 – 47%

65-plus – 25%

The report said: “Cash, which until 2023 was the second most used payment method in the UK, has now fallen below the level of direct debit, faster payments, and credit cards.”

Physical and mobile cards were the most used way to pay in the UK last year, making up 64 per cent of transactions.

Around 62 per cent of debit card payments and 55 per cent of credit and charge card payments were contactless.

Buy now pay later (BNPL) services, which allow shoppers to split payments, saw notable growth last year, with one in four (25 per cent) UK adults using them, up from 14 per cent the year before, the report said.

Fashion led the way, making up 46 per cent of BNPL transactions, with an average spend of £114.

Mobile banking, via a banking app for example, became the most common way to access accounts in 2024, used by 75 per cent of UK adults. It overtook desktop banking for the first time, UK Finance said.

Looking ahead to 2034, cards are expected to remain the most popular way to pay, accounting for around 67 per cent payments, UK Finance said.

Mobile wallet use is expected to grow, with more people, including older age groups, registering and using them more often for everyday payments.