Posts Tagged ‘Economy’

*** UPDATE 25.07.24 ***

On 25th July 2024, it was announced that no new 1p and 2p pieces had been ordered from the Royal Mint this year. Despite this, the Treasury has denied that copper coins are to be phased out.

The lack of orders for 1p and 2p coins was due to there being enough of these denominations in circulation already. In fact, there’s an estimated 27 billion coins currently in circulation in the UK, all bearing Queen Elizabeth II’s portrait on the obverse.

A spokesperson for the Treasury said “We are confident there are enough coins in the system without the need to order more this year.”

It’s not unusual for there to be periods where none of these smaller denominations enter circulation. For example, no new 1p coins were put into circulation in 1972, 2018 or 2019, and there were several years in the early 70s and 80s where no new 2p coins were issued for circulation. More recently, no new 2ps have entered circulation since 2018, with the exception of 2021.

With no new copper coins going into circulation this year, that means that there still aren’t any 1p or 2p coins featuring King Charles III on the obverse in circulation. Currently, the only way to secure the new King Charles III 1p and 2p coins is in the New UK Coinage set.

Secure yours for just £32.50 (+p&p) >>

*** UPDATE 03.05.19 ***

This week, the UK Treasury confirmed that 1p and 2p coins will continue to be used “for years to come”.

A year after Chancellor Philip Hammond declared these lower denomination coins ‘obsolete’, their safety has now been secured.

There was much discussion regarding the future of 1p and 2p coins following the Treasury’s doubts over the validity of these coins, as well as the £50 note in the 2018 Spring Statement.

Now that the result of the review has been announced, what do you think about the decision and do you think the pennies should be dropped?

Following the 2018 Spring Statement, a spokesman for Theresa May said that there are no current plans to abolish the coins, however with the increased move towards digital payments, questions still remain as to whether it makes economic sense to continue producing these less frequently used coins and notes.

The Treasury consultation document revealed that The Royal Mint is currently issuing more than 500m 1p and 2p coins each year in order to replace those falling out of circulation.

In fact, six in ten UK 1p and 2p coins are only used once before being saved in a jar or thrown away!

Countries such as Canada, Australia, Brazil and Sweden have already scrapped lower denomination coins that are not in demand and it seems that the UK is also beginning to question the future of these coins as demand continues to fall. But how would you feel about removing 1p and 2p coins from circulation?

Only 15% of consumer spending in 2015 was accounted for by cash, with more and more people now turning to contactless and other digital payments – a trend which is forecast to become the most popular payment method in 2018.

On the other hand, the Treasury also suggested that cash is not obsolete. It’s estimated that 2.7 million people in the UK rely on cash and “It continues to play an important part in the lives of many people and businesses in the UK, whether as a budgeting tool or as a cheap and convenient method of payment”.

With regards to the £50 note, the Treasury says, “There is also a perception among some that £50 notes are used for money laundering, hidden economy activity, and tax evasion”. Despite rarely being used for “routine purchases”, there is still a demand for the £50 note overseas, alongside euros and dollars.

In our 2016 blog post, we asked Change Checkers if they thought it was time to scrap the penny and 53% of you believed we shouldn’t, as it’s part of the British culture.

Has your view now changed and do you think we should make a move towards digital rather than cash payments?

Chris Boyce said, “We have had pennies since 785 AD. I believe it’s one of the oldest coins still being used today. English heritage is being lost everyday…don’t let us loose the penny, 1233 years of history”.

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