In the News Teaching Activity – More cash transactions to help people manage their finances as the cost-of-living rise bites (Dec 2023)

Over the past decade, people have used fewer notes and coins for transactions, but now there is an increase in cash use again.

Cash usage in the UK has increased for the first time in a decade, accounting for almost 19% of transactions in 2022, up from 15% in 2021, according to the British Retail Consortium's Payments Survey. This rise, attributed to households managing budgets amid a cost-of-living squeeze, represents a return to cash following the shift to contactless payments during the pandemic. Notably, it's the first year-on-year increase since 2013. However, the recovery in cash use is modest, growing from 8.2% of total sales by value in 2021 to 11% in 2022. Both cash and contactless payments can potentially serve as ‘money’ in the economy if they fulfil the characteristics and functions of money.

Cash use grows for first time in 10 years as people pay closer attention to household budgets | UK News | Sky News

1 What are the characteristics of ‘money’?

2 What are the four ‘functions’ of money? Explain each one carefully.

3 According to the article, why has there been an increase in the use of cash payments?