How have clients' habits changed around cash and spending?

Ashley Hall
Posted by Ashley Hall
Posted on December 16, 2020 Leave a comment

It’s no secret that cash and spending habits have changed over the past 12 months. Clients are holding onto more cash now than ever before. We have written about it on the Akoni blog - clients are holding onto £3 out of every £10 that they can. Furthermore, the percentage of disposable income held in cash has risen to an all-time high of 29.1 per cent.

If you look at the Boston Consulting Group’s (BCG) findings, personal, global wealth has continued to increase across all continents since the late 90s, up until the present day. Globally, in the late 90s, personal wealth stood at $80.5 trillion. Today it stands at $226.4 trillion (total wealth defined as private financial wealth consisting of cash and deposits; bonds, equities and investment fund shares; life insurance and pensions; and other small asset classes).

Although these statistics show that the amount of cash and wealth overall has increased over the past three decades, that doesn’t mean that there have not been ebbs and flows in cash flow globally and that your average client, and even your high net worth clients haven’t felt these highs and lows throughout the last 30 years.

Besides individual situations, one thing that unites the world is global, life-defining moments that have impacted cash negatively or positively, no matter how much wealth an individual holds.

The financial crisis of 2008, the unfortunate and deeply-saddening destruction following 9/11, and more recently, the covid pandemic and lockdowns since the start of 2020, have all changed a client’s cash habits.

At Akoni, there’s nothing we love more than to discuss, explore and understand cash, and the macro factors impacting a client’s relationship with money. To support IFAs and their clients, we make it our business to know what the future holds and how we can all effectively work together to achieve the best possible outcome for a client and their cash returns.

However, to understand the future, we must first look at the past - dig into the catalysts for change in spending habits and look beyond to understand the potential trends that may come our way. 

December 2007 - June 2009: The global recession

Following the collapse of Lehman Brothers, and the sale of subprime loans, the International Monetary Fund (IMF) stated that the economic state of 2009 met the criteria for a global recession. According to the US National Bureau of Economic Research, the recession began in December 2007 and ended in June 2009.

This led many people to reduce their spending due to the significant loss in jobs, and the rate of business failure increasing. The Bank of England had to cut interest rates to really low levels to support spending and jobs. During this period, the UK economy continued to mean interest rates were kept low.

2010- 2019: The fourth industrial revolution: The rise of fintech, wealthtech, Open Banking.

Trust was understandably at an all-time low after the 2008 financial crisis.

Throughout the previous decade, as the economy worked on building itself up again, the fourth industrial revolution (the phrase was coined in 2016) ushered in a new way of using technology, implementing it wherever possible to improve experiences, products and services to the world. The financial industry was not immune to this transformation, and quietly, a new era for financial services was just starting to begin.

Many players paved the way for technologically-powered financial solutions including the well-known World Remit - an online money transfer business (2010), the first digital retail bank - Atom Bank (2014), and online challenger bank Monzo (2015). Appropriately dubbed fintech, short for financial technology, these new services were created to give power back to consumers, and to widen the choices available to conduct financial services and provide products in a brand new way to a broader, more inclusive market.

Furthermore, the breakthrough regulatory legislation Open Banking made its debut at the start of 2018. This opened up the financial landscape to new players, and mitigates the chances of ever allowing the cause and aftermath of the 2008 crisis to happen again at the hands of just a few big banks. Instead, new players have a chance to succeed by having the ability to access valuable banking data and create new products and services on top of that.

Open Banking allows third-party, secure permission to a client's financial accounts, and gives them access to new services not offered by their current banking provider. The legislation gave clients from all walks of life the ability to access financial services that may have previously seemed out of reach, including new investment opportunities and wealth management services believed to be previously only utilised by high net worth individuals.

Not long after, the wealth industry saw the potential in digitising many of the services usually conducted in person or done manually, as cash and financial habits began to change, and in-person consultations transitioned online. Akoni is proud to have been one of the first technology-powered cash management players to arrive on the scene in 2015.

2010 - 2019: The rise of online banking, shopping and spending

Due to the rise in digitisation, and its journey to the mainstream, people started to become very comfortable with the concept of using their smartphones and computers to undertake their financial tasks, shop online, and gain new knowledge on how to manage their cash to get the most out of their money, including getting better returns.

According to the Office for National Statistics, average weekly household expenditure in the UK was £572.60 in the financial year ending 2018; the highest weekly spend since the financial year ending 2005, after adjusting for inflation. Furthermore, according to BCG’s findings, global wealth had its biggest jump between 2018 and 2019 (from $207 trillion to $226 trillion) since the 90s. 

Technology instantly transformed the way that clients spent their cash, and how they handled payments. Thanks to the rise of the internet, social media and influencers during this decade, there was a need to buy more experiences to showcase online, than to save

Yet, the very generation responsible for the popularity of social media, and the biggest customer for social media sponsored e-commerce, seems to still be financially weary since the financial crisis. In 2017, Business Insider stated: “Before many of today's 18-34-year-olds started investing, 82% of those surveyed said that their attitudes and habits about saving money were already being formed by the crisis. Older generations were much less affected, with 13% of Baby Boomers and 14% of 65+-year-olds saying their decisions were affected by the crisis”.

A survey from Fidelity in 2013 showed that nearly half of respondents were saving more, reducing debt and building an emergency fund in light of the aftermath of the 2008 financial crisis. The survey also found that 78% of those who have taken steps to shore up their finances say the measures are part of a new and permanent personal financial strategy.

Pre-2020 pandemic, and fast forward six years later from the Fidelity report, one report stated that only 5 out of 10 clients save only up to 10% of their income, two out of 10 clients saves more than 40% of their income, and one out of 10 clients don’t save anything at all.

Lastly, it should be noted that the way we spent cash also changed in this decade. Card payments accounted for half of all payments in 2019, and cash payments decreased by 15% in 2019 according to UK Finance. This supports The Guardian who states that the number of people in the UK who are living “an almost cashless life” has more than doubled in two years, to 7.4 million. 

2020 and beyond: Covid 19, lockdowns and the impact on cash habits

As Covid struck in early-2020, and ensuing lockdowns took place, clients saved more than ever seen before. Worries about job security, and less financial extras such as transport, and eating out, encouraged people to save more and spend less. More than one-fifth of usual household spending was prevented by the first lockdown. Plus, the decrease in in-person shopping pushed a surge in the rise of technology-based financial apps and services by 72% according to Forbes. Nonetheless, UK spending has already bounced back and has exceeded last year’s level of spending for the first time since the first lockdown according to the Financial Times.

Clients’ increased trust in technology-powered apps and products to help them make financial, self-serviced decisions, along with the forced nature of having to go cashless for the sake of cleanliness so as not to spread Covid further, had several consequences: that UK bank branches closed at an alarming rate, customer-facing cash management services had to find new ways to service existing customers and entice new customers who prefer a ‘do-it-yourself’ approach through technology, and investments into environmental, social and corporate governance focused funds (ESG) grew exponentially.

These trends show that clients want to have more control over what they use their cash for - that it aligns with their values, that clients want to have quicker, convenient, almost instant ways of accessing financial services, and that clients are looking at opportunities where they may not needlessly spend their cash if they can choose a different, cheaper alternative instead. This might include working from home versus taking the train every day (according to the Office of National Statistics, in 2018, transport remained the category with the highest average weekly spend of £80.80, equivalent to 14% of households’ average total weekly household expenditure), or making lunch at home versus spending daily cash on lunch at the local market. Yolt stated that their users have spent 70% less on eating out since the first week of March.

These trends are unlikely to change over the next five years. Financial providers, especially those in the wealth management sector, are looking at how their current processes can be turned into streamlined, sleek, easily accessible experiences, not just services. Those who will succeed will move past the stuffy, uptight reputation that the finance sector is usually associated with, and provide unforgettable products loved by the masses not just for the way it is presented, but for opening up financial opportunities to the majority, not the minority of the UK.

At Akoni, we look at both macro and micro environmental factors that can affect a client’s cash. We utilise many sources of information and data points from our global financial partners. We then feed this into our tech, design and marketing decisions when implementing platform changes that will best service advisors and their clients through these unpredictable times.

Although we can’t predict pandemics, financial upheavals (subpar loan classifications pre-2008) or global atrocities that become the catalysts for financial crises, we can make every effort possible to lessen the impact if it occurs. How can we do this? By listening to our clients, being aware of the world around us, changing with the times effectively, becoming more inclusive of those advisors we serve and by always looking ahead at how a client’s financial experience can be better improved on.

So, why should you choose Akoni to help you with your client’s cash decisions?

1) Safe and secure with the FSCS Government deposit guarantee

All deposits are held with each bank providing protection of up to £85,000 per bank, or up to £1 million for Temporary High balances.

2)  Diversifying risk (spreading money across savings providers)

With the option to spread cash across several providers on the Akoni Cash Management Platform, you can diversify risk, and increase the chances of positive returns.

2) Increased returns & Better interest rates

In a climate of economic uncertainty, and with interest rates being cut across many providers, it’s not easy to find decent interest rates in a simple way. With Akoni, you can find competitive interest rates to suit your client’s specific needs. 

4) Quicker, and hassle-free - no form filling

Akoni Hub provides a hassle-free cash management experience - your clients can onboard and open an account online with no fuss. Clients will only need to complete one AML/KYC process, can switch between providers, and manage their account on the Akoni Cash Management Platform in just a few clicks.

5) White label Adviser portal and tools 

You have the flexibility to create a platform that works for you and your clients. Add your branding to showcase who you are through a sleek, professional cash management platform designed with you in mind.


The award-winning Akoni Cash Management Platform is already leading the way in the wealth management sector, and has partnerships with Barclays, Aldermore, Investec, Clydesdale, amongst others. The ability to white label the platform gives IFAs and financial advisors flexibility to help their clients move cash depending on ever-changing macro and micro environmental factors.

Find out more about Akoni: Akoni is an award-winning UK cash platform, which provides a marketplace to IFAs, financial advisors and wealth managers through a bespoke white-label offering, or off-the-shelf offering. Akoni uses innovative technology to personalise cash planning solutions for clients, and also provides a full API solution to banks and insurance clients.

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