DAN HYDE: Why cash is still king


Changes: Just 40 per cent of the payments we make are now in coins and notes

Changes: Just 40 per cent of the payments we make are now in coins and notes

Changes: Just 40 per cent of the payments we make are now in coins and notes

One of my earliest memories of my late grandfather is standing with him and my dad on Bournemouth Pier feeding pennies into a slot machine in the forlorn hope of a small win.

Every Christmas in those days, Aunt Frieda would hand me an envelope stuffed with 2p or 5p pieces that she had saved throughout the year. 

The whole packet usually added up to no more than £5, but to me it felt like all the money in the world.

Everyone seems to have a fond memory to do with coins from their childhood.

But while it would be a shame if children were deprived of these little pleasures, we must not let sentimentality get in the way of a serious debate about the death of cash in Britain.

Just 40 per cent of the payments we make are now in coins and notes, down from 87 per cent in 1985.

Card and mobile payments have overtaken them, thanks to the rise of internet shopping and contactless technology, which lets you tap-and-go without entering a Pin.

So few people now use 1p and 2p coins that the Government last week raised the prospect of consigning these denominations to the same dustbin of history as the shilling and ha’penny.

That idea has since been dismissed by the Treasury — but for how long? If cash disappears from our High Streets, we will lose control over the way we spend our money and any sense of choice we currently have as consumers.

Pensioners on fixed incomes, such as 70-year-old Jacky Hailstone, rely on notes and coins for their weekly budget. If a bank’s computer system goes down and our debit cards stop working, it’s cash we use to feed our families and put fuel in the car.

Parents use old coppers and piggy banks to teach children about the value of saving. With a card, everything about your spending — from your gas supplier’s name to how much you forked out at the pub on Friday — is logged on a computer somewhere. 

Should the likes of 69-year-old Jane Dough, who hate that idea, be forced to give up their privacy?

Millions of newsagents, butchers and market traders might have something to say about it, too.

Every time you spend on card, your bank pockets a small fee from the merchant or retailer. No wonder bank bosses are so keen on digital money when it means bigger profits for them.

There are positives to scrapping 1p and 2p coins and eventually going cashless, not least the stronger consumer protections offered by cards and the convenience of never needing to visit an ATM. 

But make no mistake: scrapping cash completely would mean sacrificing our right to privacy and handing banks more power to tell us how to live our lives.

Pension poser

Should you accept an offer from your pension company to boost your fund by 80 per cent if you give up perks that guarantee a generous income in old age?

It’s a tough question and, until we see the details of the proposals from Royal London, Money Mail remains cautious.

The guaranteed annuity rate you’re being asked to sacrifice will typically pay an income of around 10 per cent from your nest egg — that’s every year for life. In these days of low rates, you won’t find a better deal anywhere.

The downside is that if you die early in retirement, you lose the whole pot — so there are arguments on both sides and Royal London insists savers who don’t like annuities (there’s nothing wrong with that attitude, by the way) will get much better value thanks to its new deal.

My advice is to tread carefully and speak to a financial adviser (Royal London is offering to pay towards this) who will analyse the numbers. The same applies for similar deals from other firms.

Get this wrong and you make an irreversible mistake.

Flush job

Another unlikely source of good customer service: this week, Southern Water.

After Diana Scholes praised Plusnet last week, Money Mail reader Pat Webster tells me her sewer blockage was sorted out in record time. She telephoned and was immediately put through to a pleasant lady who arranged an engineer for the next day.

The man arrived before 8am, got on with the job and then went to check other homes on her street. Pat says: ‘He even shut my garden gate properly!’ Keep sending me your stories of top-notch service.




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