A third of British shoppers think cash will disappear in five years, according to a new survey, despite a new five pound note coming into circulation tomorrow.

The Worldpay research, which surveyed more than 2,500 consumers, revealed that a third believes that cash will become obsolete by 2020.

The report’s findings indicate that businesses which don’t keep up with the latest payment gadgets are likely to struggle. For example a quarter of UK consumers claim to avoid shops that don’t take cards, while 30 per cent say they only use cash if they absolutely have to.

James Frost, chief marketing and commercial officer at Worldpay said: “The shift that we are seeing in terms of consumer preferences and what shoppers now expect from the high street is seismic and paying with cash is an inconvenience for many of today’s shoppers.

Whilst online stores have tended to changing expectations and delivered simplicity and flexibility through technology, physical stores are at risk of falling behind. From contactless busses to Waitrose’s first cashless store, the growing popularity of tap and go is a trend that all retailers will need to embrace or risk losing relevance.”

The trend towards going cashless is likely to accelerate as contactless technology becomes a stepping stone to mainstream adoption of mobile payments. The arrival of Apple Pay and Android Pay has spurred two thirds (67 per cent) of 16-34 year olds to leave their wallets at home, instead choosing to pay with their smartphones.

Interestingly, it’s not just the younger generation buying in to this movement - across all age groups, 54 per cent of consumers expect their smartphones to replace their card as the main method of payment within the next five years.

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