Post Office personal cash deposit volumes rise as households save early for the festive season

New Post Office Cash Tracker data and consumer research reveals that over half (54%) of households have started to save for Christmas earlier than ever this year, as rising costs put pressure on spending.

This trend is reflected in Post Office’s quarterly Cash Tracker data (from July-September), showing high levels of personal cash deposit transactions at post offices, rising by 7% year on year to over 17 million. This is up by 3% on the previous quarter, with the value also increasing by 5% this quarter, suggesting more people are putting money aside during the later summer months to prepare for winter costs.

Close to half of UK adults (43%) who celebrate or spend over the festive season expect this year to be harder to afford than last. Around one in three adults (38%) started to think about how they would afford the festive season during summer while 31% said they typically start saving money during this period.

With household budgets under increasing pressure, nearly half (48%) of people currently putting money aside say rising living costs are prompting them to save earlier this year.

Cash is playing a key role in that planning as 63% use it to budget or keep money aside for specific expenses, while 31% say cost-of-living pressures have led them to use cash more to manage their finances.

Against a backdrop of rising consumer cash deposits over the late summer period in the latest Post Office Cash Tracker, consumer research suggests that some households are also moving money saved at home into their bank accounts. Nearly one in five people (18%) who paid cash into a bank account in the past three months say they were depositing cash they had previously set aside at home, such as in a jar or tin. Together, this suggests that cash is forming a part of how households are managing their money to set it aside for upcoming costs over the festive period.

Ben Hunter Woollard, Head of Banking at Post Office, said: “As households brace for a more expensive festive season, Post Office branches have handled a high number of personal cash deposits this summer. For many people, using cash is a helpful way to plan ahead, budget and put money aside for specific costs.

“These findings underline how important cash remains and at Post Office, we are committed to keeping cash accessible on local high streets, making sure customers can securely pay in or withdraw money into their bank accounts locally, whenever they need to.”

Post Office cash transactions continued to rise alongside deposits, as personal withdrawals reached over 21 million between July and September, up 3% on the previous quarter. While many customers are depositing cash to build savings, cash also remains a valuable budgeting tool. Among those who put money aside by withdrawing cash, 46% say it helps them keep track of what they have left to spend, while 37% say it helps curb overspending.

Ying Shi, Postmaster at Caterham Post Office added:

“Post Office cash banking services are a simple and convenient way for customers to stay on top of their finances and plan ahead for future expenses.

“Many of my customers regularly come in to deposit small amounts of cash, sometimes just £20 or £30 at a time. It might not seem like a lot, but those regular deposits soon add up and help people prepare for costs they know are coming.

“Over the summer, I noticed more customers putting money aside for occasions later in the year, particularly Christmas. Some are saving for gifts for children and grandchildren, while others are setting money aside for celebrations, family gatherings or household expenses.

“Customers tell me they like knowing exactly how much they have saved and that the money is safely in their account when they need it. It gives them peace of mind and helps them avoid the stress of finding extra money at the last minute or relying on credit.

“It’s also not just about Christmas. With the cost of living continuing to concern many households, some customers are using cash deposits to build a savings pot for unexpected costs. It’s a practical way to budget and one of the reasons our cash banking services remain so valuable to customers.”

Sheila Patel, 70, from Selsdon, Surrey said:

“I have a savings account with the Post Office and regularly put money into it, but over the summer I started depositing cash more often to help me prepare for Christmas and Diwali.

“I like being able to put money into my account straight away and know it’s safe and secure. Having those savings set aside gives me confidence because I know the money will be there when I need it.

“I have four grandchildren and all their birthdays fall in November, which is also when Diwali is this year, so it can be a very expensive time. By putting a little bit away throughout the summer and autumn, I know I’ll be able to cover those extra costs without worrying.

“My husband and I are retired and live on our pensions, so whenever we have a little money left over at the end of the month, I like to deposit it into my savings account. Saving little and often really works for us and helps us feel more prepared for whatever the year brings.”