Did you know... that cheques are to be abolished in 2018?

THE 31st OCTOBER 2018 is the date on which payment by cheque will end. Cheques, which have been used to make payments instead of cash for centuries, will cease to be used by the banking system from this date.

Cheque - a thing of the past?

Cheque use has fallen by 40% in the UK since 2004, although over 4 million of them are still issued everyday. But the payment method is considered outdated by the Payments Council who speak on behalf of the major banks and financial institutions. They see electronic forms of payment as cheaper saving both time and processing costs, the benefits of which can be passed onto customers.

However, the abolition of cheques may have a detrimental affect on small businesses and charities claims Yorkshire MP, David Ward. The MP has moved a Bill in Parliament to ensure that cheque facilities continue after 2018. The Federation of Small Businesses argue that cheques provide an easy-to-track audit trail, are easy to reconcile, require minimal administration, and they are convenient for customers. The abolition of cheques would increase the admin burden on small businesses.

Charities receive a significant proportion of their income via cheques. Whilst many major national charities will be able to adapt to electronic forms of payment, it is believed that smaller local charities reliant on volunteers will suffer.

Those who will find it hardest to adapt to a cheque-less society, are those who will be elderly in 2018. AGE UK believe that 64% of elderly people do not use the internet, and whilst that figure is expected to fall by 2018 there will still be a significant proportion who will revert to using cash for transactions rather than the internet. The fear is that elderly people start keeping large volumes of money in their houses. The 'cash under the mattress' becomes the pot from which to pay for day to day necessities and outside help. Elderly people then become targets for burglars and other criminals.

David Ward MP's Bill to prevent cheque abolition will be heard in Parliament in June 2011.