UK Cash Hoarding Soars as People Seek Permissionless Money

Cash hoarding in the UK reveals that despite growing reliance on digital payments, people still want permissionless money. The Bank of England reports that cash usage has decreased from 58% of payments in 2009 to just 8% in 2025, but the value of banknotes held by the public has increased from £50 billion to £94 billion over the same period.

The 'paradox of banknotes' highlights the importance of having a backup option for financial security. While digital payments are convenient and widely accepted, they rely on complex infrastructure that can fail in times of crisis. In contrast, cash provides an independent means of payment that doesn't require technology or permission from institutions.

During recent crises, such as the 2008 financial crisis, Greece's sovereign debt crisis, the pandemic, and the war in Ukraine, there has been a surge in public demand for cash. The European Central Bank notes that physical cash helped people continue with their lives when digital payment infrastructure failed, although shops still needed to be open and capable of serving customers.

The World Gold Council reports that global bar and coin demand increased 16% in 2025 to roughly 1,374 tonnes, the highest annual total since 2013. The appeal of gold lies in its ability to provide an asset that isn't tied to a particular currency or institution.

Preserving cash gives people a small amount of independence and control over their financial lives. It's not about accumulating wealth but having a backup option when the system fails. In the UK, households need to hold £94 billion in notes, which is a significant amount, but it's also a reminder that having access to money during emergencies is crucial.