Review to outline future of 1p and 2p coins
The Treasury plans to publish a review into the future of 1p and 2p coins.
Speculation has been rife that the government will scrap the coins. In the 2018 Spring Statement, Chancellor Philip Hammond called them ‘obsolete’, and suggested that they could be scrapped altogether, along with the £50 note, which is often used by criminals.
Economists at the Bank of England said that removing the copper coins from circulation would have ‘no significant impact on prices’, and that retailers would simply ’round up prices to the nearest 5p’.
Meanwhile, the Treasury consultation revealed that the rise in popularity of digital payments has caused a decline in the use of cash as a form of payment.
It also suggested that most 1p and 2p coins are only used once before being discarded or put into a jar. In addition, the value of the 1p coin has been reduced by inflation so much that it is now worth less than the halfpenny when it was abolished in 1984.
The Treasury has declined to comment on the matter, and stated that the results of the review ‘will be announced shortly’. However, a government source has said that the penny coin ‘won’t be scrapped’.