UK Government Recommends Households Hold Cash Reserves Amid Digital Vulnerabilities

The UK government is now recommending that households hold physical cash as part of their emergency preparedness plans, a notable shift as reliance on digital payments grows. This recommendation is part of the government's "Be Ready" campaign, which outlines essential contingency planning for major incidents or emergencies.

The campaign advises individuals to store three days' worth of food and water, along with essential items like wind-up radios, torches, and batteries. Significantly, notes and coins have now been added to this list of recommended emergency supplies. While the government has not specified an exact amount to hold, the inclusion of cash reflects a growing awareness of the vulnerabilities inherent in digital payment systems.

Recent temporary bank outages and broader concerns about cybersecurity and cloud infrastructure have highlighted the potential disruption when digital systems fail. John Howells, chief executive of Link, a cash machine network, emphasized that even short-term outages can significantly impact people and businesses that rely exclusively on digital transactions. "This week we were reminded again of the everyday vulnerabilities of digital systems and the disruption they can cause for millions of people and businesses when things go wrong," Howells stated.

This advice aligns with findings from an exclusive survey for This is Money by Link, which revealed that 56% of people believe cash is vital in the event of digital payment outages. The survey also found that only 17% of households currently stash cash at home specifically for such scenarios, a figure likely to increase following these recommendations.

Several European countries already provide guidance on cash reserves. The European Central Bank suggests €70-€100 per person, equivalent to 72 hours' worth of spending. Similarly, Holland recommends €70 per adult plus €30 per child, also for three days' worth of expenses. Sweden advises holding a week's worth of cash, while Finland recommends 72 hours' spending. Austria suggests €100 per person, and Spain and Portugal recommend keeping a 'small amount'. In contrast, Britain, France, and Germany have historically offered no specific guidance.

Link has proposed its own guidance, suggesting £50 for every adult in a household and £25 per child. The median amount currently kept in wallets is around £20, with an additional £10 at home, according to Link's data. Howells advises keeping any stored cash in a safe, secure, and accessible location, and ensuring it is covered by home insurance.

The survey also indicated that many people are already prepared with other emergency supplies. Nearly half of respondents reported having battery-powered items like torches and tinned goods. Additionally, 37% keep a power bank for charging phones, 20% have a portable gas hob, and 15% possess an analogue radio.

Link continues to work on protecting access to cash, noting its role as a vital backstop even as digital payments become more prevalent. They are also collaborating with the banking industry to enable contactless cash withdrawals from ATMs. Access to cash will remain available through bank branches, banking hubs, the Post Office network, and ATMs.