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US News Government to consult on ditching 1p and 2p coins

18:56  13 march  2018
18:56  13 march  2018 Source:   news.sky.com

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The Government will consult on whether to keep 1 p and 2 p coins , along with the £50 note.

The government has hinted that it may ditch the £50 note and 1 p and 2 p coins as part of a move to make cash fit for purpose. 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.

Lots of British one pence coins © Getty Lots of British one pence coins

The Government will consult on whether to scrap 1p and 2p coins, along with the £50 note.

As part of his spring statement on Tuesday, the Chancellor announced a call for evidence on encouraging cashless and digital payments.

In documents released alongside Philip Hammond's update on the UK economy, it was revealed the Government wants to know whether the "current denominational mix meets the needs of cash users".

In a paper titled "Cash and digital payments in the new economy: call for evidence", Treasury officials highlighted how - as the use of cash declines and contactless payment increases - the continuing processing and distribution of coppers may not be cost-effective.

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As a result of the rising price of base metals, the composition of 1 p and 2 p coins was changed from bronze to copper-plated steel in 1992. Since then all 1 p and 2 p coins intended for circulation have been struck in copper-plated steel, with the exception of a quantity of

The debate on whether to scrap 1 p and 2 p coins has been reignited by the sale of 99p Stores to Poundland. Nicole Blackmore sets out why she supports the end of coppers.

It is noted how 60% of 1p and 2p coins are only used in a transaction once before leaving the cash cycle, with coppers then either saved or, in 8% of cases, thrown away.

It is estimated the Royal Mint has needed to produce more than 500 million 1p and 2p coins each year to replace those falling out of circulation.

But the cost of processing and distributing these low denomination coins is the same as higher denomination coins.

This means there is a high cost to distributing 1p and 2p coins relative to their face value and usage.

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