Should you have a cash reserve at home? Just 17% of us do – and the Government now recommends you hold some

The slow demise of physical money has been well documented over the past decade with usage down drastically.

But recently, we’ve had stark reminders that cash can be well worth holding.

More of us than ever before rely solely on digital systems for payments – and this week, we once again saw they can be vulnerable.

Earlier in the week, some banks went down temporarily and in a backdrop of online cloud outages and cyber security fears, the Government has highlighted its ‘Be Ready’ campaign.

This checklist is part of its recommended household contingency plans in the event of a major incident or emergency.

They’ve stated three days worth of food and water should be squirreled away, alongside wind-up radios, torches and batteries.

Many are already prepared in this way, especially if you’re in an area used to storms and electricity outages.

However, part of the checklist included notes and coins.

The Government didn’t go as far as recommending how much to keep, but it’s part of a growing notion that we shouldn’t write off cash – and its power – completely.

Earlier in the year, we revealed that The House of Lords was working on a new National Resilience Committee.

It has been tasked to look at the UK’s approach to physical cash – and whether Britons need guidance on keeping an emergency stash.

Some European countries give guidance on cash reserves. The European Central Bank recommends €70-€100 per person, or 72 hours’ worth of spend.

Holland says €70 plus €30 for each child, again with three days’ worth of spend. Sweden, which was once on the cusp of going cashless, recommends a week of cash reserves.

Finland recommends 72 hours’ worth of spend, Austria €100 per person, while Spain and Portugal recommend keeping a ‘small amount’.

But Britain, France and Germany have no guidance on keeping physical money at hand.

Cash machine network Link believes the guidance should be £50 for every adult in your household, and £25 per child.

A recent exclusive survey for This is Money by Link showed 56 per cent believe cash is vital in the event of digital payment outages.

The research asked people about contingency planning in case of a major disruptive event such as a power outage, IT failure, natural disaster or cyber-attack.

It revealed in a disruptive event to digital payment networks resulting in card or mobile payments not being accepted in shops, that 17 per cent stash cash at home specifically for this type of scenario.

It is likely this figure will increase.

John Howells, chief executive of Link, told This is Money: ‘This week we were reminded again of the everyday vulnerabilities of digital systems and the disruption they can cause for millions of people and businesses when things go wrong.

‘Even if an outage lasts for just a few hours, there are many people now who rely exclusively on digital systems and many companies that operate entirely digitally.

‘This week the Defence Secretary Wes Streeting published the Government’s “Be Ready” checklist as part of its ongoing civil contingencies planning in the event of a major incident or emergency.

‘This includes notes and coins.’

The median amount people keep in their wallets is around £20 with a further £10 already at home, according to Link.

John adds: ‘Hopefully this gives you a clearer idea of what’s needed.

‘Naturally, keep it somewhere safe, secure and accessible. Also ensure that your cash is covered by your home insurance.’

The exclusive survey for This is Money in March shows some people were already well prepared for emergency situations.

Almost half already had battery-powered items like a torch and a supply of tinned goods.

Some 37 per cent keep a power bank in the house to keep phones charged, 20 per cent have a portable gas hob (eg a camping hob) and 15 per cent have an analogue radio.

John adds: ‘Our job is to protect access to cash and even as more people choose to use contactless and digital payments more frequently in future, cash will remain a backstop and part of a healthy payments system.

‘We are also working with the banking industry to enable people to withdraw cash from ATMs using contactless technology.

‘Bank branches, banking hubs and of course the Post Office network, alongside ATMs are there to provide access to cash, should you need it.’