This is why 1p and 2p coins might soon be scrapped

Monday, 29th April 2019, 15:04 pm
Updated Monday, 29th April 2019, 16:05 pm
The fate of 1p and 2p coins will be revealed this week (Photo: Shutterstock)

A year after chancellor Phillip Hammond called them “obsolete” in his 2018 Spring Statement, the fate of 1p and 2p coins will be revealed this week.

The treasury has said that the chancellor will decide on the future of the coins in the coming days.

What is the likelihood of the coins being scrapped?

There are some signs pointing to the discontinuation of the coins, with the chancellor’s spring statement last year leaning in favour of pulling them from circulation.

The 2018 March treasury consultation document outlined the steep increase in people using digital payments versus cash.

“Digital payments have grown by around 85 per cent since 2006, with a corresponding decline in the use of cash,” the document stated.

After the 2018 call for evidence on the usefulness of the coins was met with backlash from the public, a spokesperson for the prime minister said there were “no proposals to scrap 1p or 2p coins”.

Regarding the current fate of the pennies, a report from the Mail on Sunday claimed to have been told by a government source that “the penny coin won’t be scrapped.”

Do people still use copper coins?

According to the Royal Mint, around 60 per cent of the copper coins are only used in one transaction before being hidden away in a jar or piggy bank. The chancellor reported that one in 12 of the coins are put in the bin.

However, previous plans to discontinue the copper coins have not gone down well.

Smaller charities especially that rely on collection buckets would be directly affected as they collect a significant amount of one and two pence coins. Donating loose change is one of the most popular ways for the public to give their money to charity.

Have other countries gotten rid of their low denomination coins?

Many countries across the world have scrapped their penny equivalents.

Canada, Brazil, Sweden and Australia are all places that have gotten rid of their lowest value coins.

This article originally appeared on our sister site, The Scotsman