Coronavirus cash crisis leaving vulnerable people with no way to pay

Vulnerable people are at risk of being left with no way to pay for essential products and services as the coronavirus crisis accelerates the move to a cashless society, new Which? research has found.

Those who need to stay at home during the pandemic most often pay friends, family and neighbours in cash for picking up their food and other vital items.

When we surveyed 2,091 people in May, one in five said they're helping to manage the finances and/or shopping for someone outside of their immediate household, and the majority had been repaid in cash.

Yet, one in 10 were refused by shops when trying to pay with cash - at a time when only shops selling essential goods were open.

Here, Which? explores why access to cash still matters and what you can do if you're reliant on it day to day.

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Is cash hygienic?

Early media reports suggested the World Health Organization (WHO) warned against using cash - a claim that WHO later denied.

According to the Bank of England: 'Like any other surface that large numbers of people come into contact with, banknotes can carry bacteria or viruses.'

So whether handling cash, bank cards, phones, shopping baskets or payment terminals, wash your hands when you get home.

If you can, pay using a bank card. In April, the contactless payment limit was raised from £30 to £45 to reduce the need to touch payment terminals.

• Find out more: the Which? health experts on how to keep your hands clean

Why cash use still matters

Our research shows that many people are still reliant on cash, whether that's because they can't use mobile or internet banking, live in remote areas where their broadband connection is unreliable or local retailers only accept cash.

Other people are reportedly getting paid in cash for helping people out. A recent Which? survey found that one in five people are managing the finances or buying food or essentials for someone outside of their immediate household. Of those, more than half are getting paid in cash.

Almost a third of these cash payments were made in return for making an online order on someone else's behalf.

But when it came to actually trying to spend this cash, one in 10 people said shops had refused to accept it - and this was at a time when the only shops open were selling essential products.

Cash is an essential backup for many

Nearly half of those who rely or depend on cash are over 65, while nearly a third are aged 55 to 64. Both groups are more likely to need to self-isolate and ask friends, family or volunteers to shop for them.

Indeed, Which? has heard of numerous cases where cash is an essential way for people to get help, including one person who is reimbursed in cash for delivering supplies to their 91-year-old uncle, and another who shops for neighbours after cash and a shopping list have been posted through their door.

Two thirds of those who depend on cash have no digital skills, while just over half have basic digital skills.

Just over a third are likely to be a vulnerable customer, with 42% of these customers having a physical or mental condition and 43% having experienced a life shock.

It may be impractical for these people to apply and learn to use a debit card for online shopping in the midst of the pandemic.

• Find out more: how can vulnerable households get food deliveries?

Post Office cash delivery

The Post Office has repurposed its foreign currency service to deliver cash to the homes of vulnerable customers, with the help of the Department for Work and Pensions (DWP).

At the moment, this is just for vulnerable people in England who are shielding at home and receive benefits such as pensions.

The Post Office offers two other options to help you pay volunteers who are shopping on your behalf.

The Payout Now service, currently only for HSBC customers, sends a voucher by text, email or post to a customer who can share it with a trusted person to withdraw cash.

Fast Pace service, currently only for Santander customers, allows a customer to arrange for a trusted person (such as a carer or family member) to collect a pre-authorised cheque and cash it in at a Post Office branch.

If you think either service could be useful to you, it's worth contacting your bank or building society to see what alternatives it offers.

Paying volunteers

If you're self isolating, call your council about local 'Mutual Aid' groups. You can also find these on Facebook and the Nextdoor app. Volunteers from these groups can shop for you at retailers even if you can only pay in cash.

Many supermarket and other retailers have introduced pre-paid cards for volunteers that you can top up online, essentially repurposing their existing gift card schemes.

Starling Bank has also introduced a 'connected card', which you can give to a trusted volunteer. You can limit how much money this volunteer has access to.

• Find out more: how to shop safely at the supermarket

Banking difficulties

Being able to withdraw cash only helps if you've got money in your bank account. But the pandemic has made it difficult to manage accounts or deposit cash.

With many bank staff being sick or self-isolating, lots of branches have been temporarily closed or had their hours reduced. Lloyds, NatWest and Royal Bank of Scotland Mobile branches have also been closed.

You can find out how your bank has amended its online, telephone and in-branch bank options:

Some bank customers who have contacted us via our Which? Money Facebook page and our Which? Team Cash Facebook page have also expressed concerns about running out of money due to not being able to pay cheques into their local branch.

The good news is that many banks and building societies have introduced the ability for you to pay a cheque in by taking a photo of it and uploading it to your mobile bank app. The Cheque & Credit Clearing Company has some guidance on how this works.

Many banks have relaxed their policies on allowing a third-party trusted volunteer to do your banking on your behalf.

Our long battle for access to cash

Prior to the lockdown, Chancellor Rishi Sunak had committed in the Budget to protect access to cash.

In April, Barclays, NatWest, Sainsbury's Bank and PayPoint agreed to replace free-to-use ATMs lost over the next 12 months if the local community faces losing free access to cash.

Which? is therefore calling on the government and retailers to find a way for people who rely on cash, some of whom don't have a bank card, to pay for essentials.

Anabel Hoult, Which? chief executive, said: 'We are pleased that the chancellor has taken decisive action to ensure that millions of people who have been hit hard by bank branch and ATM closures will continue to have access to cash.

'We know that the cash system faces irreversible damage within the next two years, so the government must swiftly press ahead with its plans to legislate, which must include putting a single regulator in charge of protecting cash.

• Find out more: the Which? 'Freedom to Pay' campaign