Do you still use 1p and 2p coins?

Adjust Comment Print

The UK government is considering phasing out 1p and 2p coins, as well as £50 notes, in a bid to tackle tax evasion, money laundering and waste.

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?".

The UK Treasury has questioned the future of the lowest-denomination UK coins in circulation, valued at 1p (GBP0.01) and 2p (GBP0.02), as part of a consultation document on the growing move away from cash towards digital payments.

The spokesman said: 'The call for evidence is simply meant to enable the Government to better understand the role of cash and digital payments in the new economy.

An extra 500 million copper coins need to be minted each year to replace those falling out of circulation.

Despite seeking views on the future of cash, the Treasury says that coins still have a vital future in the UK.

Titans agree to 4-year deal with RB Dion Lewis
Butler is receiving a five-year contract worth more than $61 million with $30 million in guarantees, per NFL Network. With free agency opening on Wednesday and still $64 million under the cap, the 49ers have a lot business to get to.


However, the cost of producing low denomination coins is the same as higher denomination coins, the same paper says.

The Treasury said surveys showed 11 percent of those aged 25-34 said they "rarely used cash" at all, compared with only two percent of those aged 55-64. Cash has fallen from being 62 percent of all payments by volume in 2006, to 40 percent in 2016, and is predicted by industry to fall to 21 percent by 2026.

"There is also a perception among some that £50 notes are used for money laundering, hidden economy activity, and tax evasion".

"From an economic perspective, having large numbers of denominations that are not in demand. does not contribute to an efficient or cost-effective cash cycle", the document said.

Sara Coles, personal finance expert at investment firm Hargreaves Lansdown, warned that savers could be hit. The government would "welcome all contributions to the debate" and would respond after the consultation closes on 5 June, he added. In many cases people collect their small change at the end of the week and add it to their savings jar.

Aside from taking them to the bank to swap for proper cash, when was the last time you actually paid for something with some copper coins?

Comments