Consumer group Which? carried out two separate surveys, covering a total of more than 3,000 shoppers, to gauge their experience of payments.

The findings prompted Jenny Ross, Which? money editor, to call on firms to ensure people are not hindered by the transition to digital payments.

She said: "Cash is still a vital way to pay for millions of consumers.

"So it is very concerning to see many still reporting difficulties when trying to spend their notes and coins - even as the country moves out of lockdown restrictions."

A phone poll included consumers who may be less digitally capable and potentially more dependent on cash. The second was carried out online.

Around a fifth (18 percent) in the phone survey reported being unable to pay with money at least once between April and July, as Covid restrictions were being lifted.

Of those who experienced cash refusal, one in six (16 percent) were then unable to pay for an item.

In the online poll, people were most likely to be unable to pay with notes and coins when buying groceries - accounting for a third (35 percent) of incidents. This was followed by small purchases in shops and buying refreshments while out.

Eight in 10 (84 percent) consumers believe businesses and shops should continue to accept cash, Which? found.

And this comes after Bank of England research suggested it is unlikely people are at risk of catching coronavirus from banknotes.

Which? is encouraging businesses to sign up to its cash friendly pledge to ensure people who use cash regularly are not excluded.

Jonathan Jaffa runs York Supplies in Birmingham, a business that recently signed up to Which?'s scheme.

He said: "The ones with no choice but to pay with cash feel that we are supporting them as a part of the community rather than dismissing them as an unimportant fringe of society."

The Government has said it will legislate to protect the future of cash.

But Which? believes that, as part of the measures, the Financial Conduct

Authority (FCA) should be tasked with tracking levels of cash refusal.

Natalie Ceeney, chair of the Access to Cash Review and who now leads the industry Access to Cash Action Group, said: "This is really worrying to see. Not everyone is able to use digital and contactless payments.

"What happens if people can't buy food or medicine? We've all focused on the issues about getting cash - but the issues about being able to pay with cash are just as important.

"Small businesses are the lifeblood of many communities, but to keep accepting cash they need to be able to deposit takings easily, something which has got harder and harder as bank branches have closed.

"We are piloting solutions - such as deposit-taking ATMs and shared bank hubs to support consumers and small businesses. But we really need action now to stop real harm being done to vulnerable consumers."