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December 8, 2009

Britons opt for savings stashed in cash

by Gill Montia

Story link: Britons opt for savings stashed in cash

The financial crisis has encouraged an increasing number of Britons to keep their savings close at hand, in the form of high denomination bank notes.

According to the Bank of England, the value of notes in circulation has been on the rise, despite the fact that less are being passed around the High Street where cash transactions now account for only 4% of purchases, by value.

Compared to two years ago, there are 40 million more £50 notes in circulation, some of which are likely to be stashed in secret hoards around the UK’s homes.

Speaking at the Banknote Conference in Washington, DC, the Bank’s chief cashier, Andrew Bailey, attributed the change to a loss of confidence in banks and very low interest rates.

Mr Bailey also addressed the problem of the shortage of £5 notes, saying the number in circulation has increased but there is more to be done.

Two recent pilot schemes run by the Bank suggest progress can be made; one major bank has stocked some of its ATMs with £5 notes to test the effect on its cash business, and a major retailer has supplied more fivers to many of its stores to be used as change.

 

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