The rise of cash

An increasing number of people are turning back to spending cold, hard cash in a bid to curb their spending in the face of the credit crunch.

This is according to Richard Dodd of the British Retail Consortium (BRC), who has rebuked claims that cash is dead as a means of spending.

Indeed, BRC research has found that cash is now used for 60 per cent of all transactions, showing a rise of six per cent when compared with last year.

Meanwhile, calculations from uSwitch.com have shown that, with the UK owing what it does, 3.5 million people will take almost 30 years to clear the debts they have incurred on their credit cards.

Mr Dodd explained the reasons behind Britons' increasing use of cash, saying that real money is easier to measure.

"Customers have got their own personal finances under severe pressure now and so using cash is a way of keeping a tight control on how much they are actually spending. People's enthusiasm for using cards is slipping. Cash is a tangible amount; you have either got it or you haven't got it," he said.

The BRC's comments follow the launch of an advertising campaign by Maestro, which claims that the system is "the new cash" and encourages shoppers to pay for everyday items using their debit cards.