The Treasury has firmly denied any plans to phase out 1p and 2p coins, despite not placing any new orders for these denominations from the Royal Mint this year. Addressing recent reports and public speculation, a Treasury spokesperson told the BBC, “We are not scrapping 1p or 2p coins.” The decision to forego new orders is attributed to the existing ample supply of these coins in circulation.
This move sparked various reports suggesting that the decrease in cash transactions could lead to the eventual discontinuation of these smaller denominations. However, the Treasury clarified, “We are confident there are enough coins in the system without the need to order more this year.” This statement underscores the sufficiency of the current coin supply, estimated to be around 27 billion coins circulating within the UK.
The process of minting new coins is based on the Treasury’s calculations of demand, which inform their orders to the Royal Mint. Typically, coins remain in circulation for decades, which minimizes the need for frequent production runs. Historical precedents support this: in the early 1970s and early 1980s, there were several years when no 2p coins were produced. Similarly, in 2018, no new 1p or 2p coins were minted, leading then-Chancellor Philip Hammond to launch a consultation regarding the future of cash in the UK.
Despite the ongoing decline in cash transactions, particularly exacerbated by the rise of digital payments, the Treasury has maintained a stance supportive of retaining small denominations. In 2019, they assured the public that 1p and 2p coins would remain in use “for years to come,” highlighting their continued relevance in everyday transactions and the broader currency system.
This recent clarification by the Treasury emphasizes their commitment to preserving these coins, even as the landscape of cash usage evolves. The decision reflects a balance between adapting to new economic behaviors and maintaining traditional aspects of the monetary system that still hold practical significance for many people. By assuring that the current supply is sufficient, the Treasury aims to dispel any concerns about the immediate future of 1p and 2p coins, reinforcing their ongoing role in the UK’s financial ecosystem.