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UK households ‘counting pennies’ as living costs soar

·Finance Reporter, Yahoo Finance UK
·2-min read
UK households A food bank outside the stadium before the Premier League match at the King Power Stadium, Leicester.
UK households are finding it difficult to pay the bills as prices run rampant. Photo: PA

UK households are “literally” counting the pennies as they go back to cash in a bid to keep tighter control on their spending amid a cost of living crisis.

Post offices handled a record £801m in personal cash withdrawals in July, marking an increase of nearly 8% month on month.

People are "literally counting the pennies" as they grapple with rising prices, Natalie Ceeney, chair of the Cash Action Group, told the BBC.

Read more: Poundland slashes price of over 1,000 products and offer items for just 1p online

"It's absolutely because of the cost of living crisis,” she said. "People will be taking out cash and physically putting it into pots, saying 'this is what I have for bills, this is what I have for food, and this is what's left'.

In the cost of living crisis, many consumers have cited using cash as a way of helping them budget.

In total, a record £3.32bn in cash deposits and withdrawals was handled at the Post Office’s 11,500 branches across the UK.

In the cost of living crisis, many consumers have cited using cash as a way of helping them budget.

Martin Kearsley, banking director at the Post Office, said: “Our latest figures clearly show that Britain is anything but a cashless society.

“We’re seeing more and more people increasingly reliant on cash as the tried and tested way to manage a budget.

“Whether that’s for a staycation in the UK or if it’s to help prepare for financial pressures expected in the autumn, cash access in every community is critical.

Read more: Interest rates: First-time buyers face paying 40% of salary in mortgage payments

Previous research last month found that 71% of people plan on going on holiday in the UK this year plan to take out cash before leaving to go on holiday.

Personal cash deposits totalled £1.35bn, up 2% month on month, while business cash deposits totalled £1.13bn, up by 1.9% month on month.

In July, the Post Office also processed more than 600,000 cash payouts for people eligible to receive energy bill support from the government.

Watch: What is a recession and how do we spot one?