Published On: Tue, Aug 18th, 2020

Cash warning: Businesses are less likely to accept physical money – pensioners may be hit | Personal Finance | Finance

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Cash use is generally dropping in the UK as digital payment systems and banking apps become more and more prevalent in the modern economy. A new report from the payments company Square released today revealed there has been a noticeable shift in business and consumer payment behaviour, which has been greatly accelerated by the safety measures put in place to cope with .

Felipe Chacon, an Economist at Square, commented on the organisation’s findings: “Covid has changed the way we pay.

“Existing trends towards digital and cashless payments and away from cash that have been underway for years have been greatly accelerated as a result of the pandemic.

“Business owners have had to move fast, quickly adapting to new ways of getting paid.

“They’ve had to balance keeping themselves and customers safe and feel safe, alongside making every sale they can”

Some consumers may feel fairly indifferent to these changes as the digital world has largely made financial matters easier to manage.

However, elderly people and those who are retired may be drastically affected by these shifts, which could have an unexpected knock on effect for younger generations.

Killik & Co recently surveyed 2,006 grandparents in the UK, with the findings revealing that cash remains the most popular method for grandparents to pass on assets to their grandchildren.

The research from Killik & Co highlighted that four in ten (43 percent) of respondents currently use cash to support the younger generation.

Going forward post Covid-19, almost half expect to gift cash (49 percent)

However, the same research also revealed that there may be a small increase in how many grandparents seek out other methods of supporting younger generations in the coming months.

Svenja Keller, the head of wealth planning at Killik & Co, commented on the company’s findings: “Our research shows that cash is understandably still very popular with grandparents looking to help their grandchildren, but it’s interesting to note that people are starting to look at alternative ways to offer financial support as well – perhaps as a consequence of the impact that Covid-19 has had on financial concerns.

“It’s worth remembering the form in which money is gifted does not determine its destination, and grandparents gifting cash ultimately give significant flexibility to their grandchildren, who can then decide whether to spend the money, save it for a rainy day or invest it for the future and benefit from the power of compounding.

“Families may not be aware of all the options available to them when it comes to passing on wealth tax efficiently or helping children financially. A conversation with a wealth planner will help you identify what’s best not just for the younger members of the family but for all generations. Above all, it is important to seek advice so you are not neglecting your own financial needs while looking after your family’s.”

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