When the card machine's down: bank outages and keeping a little cash
UK bank IT outages, card and cash-machine failures in a power cut, and why keeping a modest amount of physical cash is sensible resilience — with the facts on access-to-cash rules and what's actually protected.
By Tom Rowland · Updated 20 July 2026 · Sourced to the FCA, Bank of England & UK Finance
Why this is worth a thought
We've become a nearly cashless country, which is convenient right up until the moment the payment system hiccups. And it hiccups more than you'd think: the nine largest banks and building societies operating in the UK logged at least 803 hours — more than 33 days — of unplanned IT and systems outages over the two years to February 2025, across at least 158 separate incidents that stopped customers accessing services.
These aren't hypothetical. Barclays suffered a major outage from 31 January to 2 February 2025, hitting customers on and around payday, and several banks were disrupted on 28 February 2025 — enough that the Treasury Committee opened an inquiry.
Card terminals and cash machines need power and signal
Both a shop's card terminal and a cash machine depend on mains electricity and a live network connection. A power cut, a bank IT failure or a telecoms outage can stop either working — sometimes all the terminals in an area at once.
That's the whole case for keeping a little physical cash at home: it's the one payment method that still works when the electronic ones don't, which makes it a sensible contingency for a few days without card access.
How much — and why "a little"
This is about resilience, not hoarding. The aim is enough to cover a few days of essentials — a food shop, some fuel, a taxi — in small denominations, so you're not trying to pay for a £4 loaf with a £50 note when the tills are offline. GOV.UK's Prepare campaign makes the same modest point.
Cash is declining but still a genuine backup: about 1.2 million people — just over 2% of UK adults — relied mainly on cash for everyday spending in 2024, and while cash fell below 10% of all payments for the first time, it remains widely used as a fallback.
There's official backing for a cash fallback
This isn't fringe advice. The Bank of England stresses that a resilient payments system depends on genuine diversity of payment methods, so that if one channel fails others remain available — and that cash gives society a reliable fallback when digital or card systems are disrupted by outages or cyber incidents.
The regulator has teeth on this now, too. The Financial Services and Markets Act 2023 gave the FCA statutory powers to protect access to cash, and its final rules (in force from 18 September 2024) require 14 designated banks and building societies, plus the LINK network, to assess local cash needs and fill any significant gaps for consumers and businesses.
One important caveat: cash at home isn't protected like a deposit
Money held in a UK-authorised bank, building society or credit union is protected by the Financial Services Compensation Scheme up to £120,000 per eligible person, per firm — a limit raised from £85,000 on 1 December 2025. That protection applies to deposits held with the institution.
Cash kept at home is not FSCS-protected. It's only covered to whatever limited cash sub-limit your home contents insurance sets, and it earns no interest. So the sensible approach is a modest home float for emergencies, kept somewhere secure — not a decision to move real savings out of the bank.
Common questions
Why keep cash if I never use it?
Because card terminals and cash machines fail in power cuts and bank IT outages — both need electricity and a live connection. A modest amount of cash is the one payment method that still works when the electronic ones don't.
How much cash should I keep at home?
Enough for a few days of essentials — a food shop, some fuel, a taxi — in small denominations. This is resilience, not hoarding, so keep it modest and stored securely.
Are UK bank outages really that common?
Yes. The nine largest banks logged over 803 hours — more than 33 days — of unplanned IT outages in the two years to February 2025, across at least 158 incidents, prompting a Treasury Committee inquiry.
Is cash being phased out?
It's declining — it fell below 10% of all UK payments for the first time in 2024 — but around 1.2 million people still rely on it, and the FCA now has legal powers to protect access to cash. It remains a protected, widely accepted backup.
Is cash kept at home protected if it's lost or stolen?
No — the FSCS doesn't cover cash at home, only deposits held with an authorised bank or building society. Home cash is covered only up to your contents insurance's cash sub-limit, which is another reason to keep the amount modest.
What protects the money in my bank account?
The Financial Services Compensation Scheme protects eligible deposits up to £120,000 per person, per authorised firm — a limit increased from £85,000 on 1 December 2025.
Sources: FCA — Access to Cash (Policy Statement PS24/8) · Bank of England — Payments · UK Finance — UK Payment Markets 2025 · Financial Services Compensation Scheme (FSCS). PreparedBritain is independent and not affiliated with HM Government.
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