1p and 2p coins could be scrapped under new Government plans

Galtero Lara
Marcha 14, 2018

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?'

But the consultation hints at the growing cost of handling these coins.

Nevertheless, with six in 10 1p and 2p coins used just once before making their way into a saving jar or simply thrown in the bin, the government wants feedback on whether Brits would want to follow the likes of Australia, Canada and Sweden in getting rid of the lowest denominations. When it costs more to produce and distribute a coin than the coin itself is worth, governments tend to decide it's a spent force - and we're rapidly heading in that direction for coppers.

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It also says that while there is "significant" overseas demand for £50 notes, there is a perception they are used for money laundering, tax evasion and other criminal actives.

The Treasury document published alongside the consultation says: "From an economic perspective, having large numbers of denominations that are not in demand, saved by the public, or in long-term storage at cash processors rather than used in circulation does not contribute to an efficient or cost effective cash cycle". Cash was used for 7.2 billion transactions of under £1 in 2006. "By 2016 it had fallen to 4bn, and by 2026 it is expected to fall to 1.3bn". More than half of those people live in households with total incomes of less than £15,000 a year.

He said: "This is a call for evidence meant to enable the Government to better understand the role of cash and digital payments in the new economy".

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