The digital revolution has changed much in society, from how we communicate to how we consume culture. It’s also had a huge influence on how we spend our money, with the decline of the high street falling in line with the shift to online spending.
Consider also the modern trends towards online banking, and our relationship with money is quite different to a generation – or even a decade – ago. We were keen to monitor this shift across different segments of society, placing individuals into four groups. These groups depended on spending preferences: cash, debit card, credit card, and PayPal.
- The nation has lost its perspective on cash
- Over a quarter of under 25s have never been in a bank
- 80% of the UK have bought online at least once
We surveyed 1500 tax-paying British adults with a range of questions about the value of things, from everyday essentials (such as bread and milk) to non-essential frivolities (such as a pint of beer or a takeaway coffee).
Look out for Part 2: Relationships, Sex & Money.
The nation has lost its perspective on cash
Those who prefer to use PayPal over other payment methods scored worst in our valuation quiz, with an average of 4/10. PayPal users were also the most likely to know the price of frivolities over the price of essentials.
In contrast, those with a preference for cash scored an average 8/10 in our quiz. Physical cash users may be a dying breed, but you won’t find them short of change when queuing for a loaf.
How real is our money?
Over a quarter of under 25s confessed to having never physically been in a bank. In the modern era, accounts can be set up online, removing the need for a physical face-to-face. 20% of under 25s also have more than one bank account. The days of individuals having one bank account and staying loyal to one institution throughout their life are already in decline. The increase of internet-only banking must also contribute to this trend.
As with utility companies and major industries, this banking trend reflects the cultural shift from institutions providing a service, to an ever-changing market in competition with itself. Young people have reacted to this sea change by being far more likely to have multiple bank accounts, regularly shopping around for a better deal.
Furthermore, the decline of cash can be felt across the board, with 1 in 4 under 25s having never found loose change, either down the back of a sofa or on their person.
Debit and credit card users are worlds apart
Differences between debit and credit card users became apparent in the survey. Although both groups scored an average 6/10 in our valuation quiz, 66% of debit card users considered themselves as spenders over savers, compared to just 43% of credit card users. 57% of debit card users will shop around for the best price, compared to less than half of the credit card users surveyed.
Debit card users also scored higher in the ‘essentials’ section of the quiz. In keeping a closer eye on their outgoings and a greater knowledge of necessary purchases over frivolities, debit card users showed more in common with cash purchasers than any other consumer group.
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Just in case you had any doubts, the world is definitely going digital
80% of all people surveyed had made online purchases, regardless of their preferred payment methods. Over a quarter used banking apps on a weekly basis. It’s the banking app that seems to be growing at a higher rate than even online banking itself, with the trend likely to be down to the time-saving qualities of checking an app over logging on to an account.
As a result, only those who favoured cash and debit cards as their favourite method of payment regularly look at bank statements. Less than half of credit card users admitted to rarely checking their bank statement, compared to less than a quarter of Paypal users.
Find Part 2: Relationships, Sex & Money here and take our quiz in Part 3: Which Famous Spender Are You?