United Kingdom could scrap 1p and 2p coins

Ministers say there are no current plans to scrap the coins but they could be ditched following a review

Ministers say there are no current plans to scrap the coins but they could be ditched following a review

As part of a tranche of documents released for today's Spring Statement, the Treasury has launched a call for evidence around use of cash and digital payments.

Royal Mint needs to produce more than 500 million 1p and 2p coins each year to replace those that fall out of circulation.

It also hinted that the £50 note could be axed as it is "rarely used for routine purchases and is instead held as a store of value". The report continues that 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, 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", the document states.

It is not the first time the idea of scrapping copper coins has been floated in the UK.

Cash accounted for just 15% of the value of consumer spending in 2015, as people increasingly turned to contactless and other digital payments.

Cash has fallen from being 62% of all payments by volume in 2006, to 40% in 2016, and is predicted by industry to fall to 21% by 2026. Meanwhile, shops are using rounded pricing to save the bother of handling low-value coins, so even those who stick with cash have less use for coppers.

However, with research suggesting that there are 2.7 million people across the United Kingdom who are entirely reliant on cash, the government is keen to stress that it will support the payment method through ATM access.

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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