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Downing Street signals 1p and 2p coins are here to stay

UK News | Published:

Downing Street indicates public support for retaining 1p and 2p coins is strong.

The Government has signalled that 1p and 2p coins are unlikely to be scrapped after a consultation on their use concludes in June.

Their future was thrown into doubt after the Treasury used the Spring Statement to launch a review into the denominational mix of coins in the economy.

Referring to the Treasury as HMT, a spokesman for Prime Minister Theresa May told a Westminster briefing: “There are no proposals to scrap one or two pence coins in the consultation that HMT issued yesterday.

“The call for evidence is simply intended to enable the Government to better understand the role of cash and digital payments in the new economy.

“One thing HMT were seeking views on was whether the current denominational mix of coins meets the public’s needs, and from the early reaction it looks as if it does.”

Asked about the future of the £50 note, which has also be called into doubt by the consultation exercise, the spokesman said that the process was on-going.

The comments come after charities raised concerns about scrapping the coins.

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“Cash is still by far the most common way people donate to charity, so the forecast in HM Treasury’s consultation document on cash and digital payments, suggesting that cash transactions will more than halve from 12 billion transactions a year to 5.8 billion between 2016-2026, could have a real impact on charities if people carry less cash to give away.

“A consultation on cash is a good opportunity for Government and charities to work together to embrace new technologies and ensure the decline of cash doesn’t get in the way of people’s desire to be generous.”

Neil Duncan-Jordan, a spokesman for the National Pensioners Convention, told the Press Association there were concerns that if copper coins were ditched, this could be the start of a more dramatic move towards a “cashless society”.

He said there should be more research, more data and more consideration.

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He said: “What we are asking for is an understanding about the impact that this may have.

“What lies behind it might be a drive towards digital transactions which aren’t always suitable for some older people… What we don’t want to see is a move towards just one way of doing things.”

Sarah Coles, a personal finance analyst at Hargreaves Lansdown, said parents might have to find new ways to get their children to save if piling coppers into piggy banks and jars was no longer an option.

She said coppers “play a small but vital role in the nation’s savings habits”.

“Particularly for kids, putting spare change into a money box can help establish a regular savings habit. It’s useful for them to be able to physically see how over time the pennies start to add up.”

Around six in 10 1p and 2p coins are believed to be used only once before they are put into savings jars – and around 8% are thrown away.

The use of £50 notes in routine purchases is rare and people perceive them to be used mainly in criminal activities, according to the Government.

The Cash and Digital Payments in the New Economy consultation released by the Government questions whether the current mix of eight coins and four banknotes meets modern needs, and if not “how should it change?”

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