In a historic first, the UK Treasury has not issued any orders for new coins to be minted for general circulation this year, the Standard can reveal. This marks the first time in the UK’s modern history that the Royal Mint has not received an official request for new coins, with significant implications for the future of Britain’s currency.
As part of an ongoing review into the UK’s coinage system, government officials are understood to be exploring various scenarios, including the potential scrapping of 1p and 2p coins. The decline of cash transactions, accelerated by the pandemic, has led to increased scrutiny of the necessity of these small-denomination coins in today’s largely cashless society.
The Treasury has confirmed that it has not placed its usual annual order for new coins with the Royal Mint, and there are no plans to mint additional 1p and 2p coins in the foreseeable future. Discussions on the fate of these coins will be held with ministers in the coming months, with proposals still in their early stages.
A spokesperson for HM Treasury stated, “The Royal Mint produces coins according to expected demand, existing buffer stocks, and orders placed by industry. We are confident there are enough coins in the system, with estimates of approximately 27 billion in circulation in the UK. The Treasury has no current plans to change the mix of UK coins.”
This potential move, which could involve the rounding of cash payments to multiples of 5p, would be the most significant shake-up to the UK’s currency since decimalisation in 1971. The scrapping of a coin denomination has not occurred in the UK since the half-penny coin was discontinued in 1984, and 1p and 2p coins have been altered over the years to ensure their scrap value does not exceed their face value.
The shift away from cash payments has been stark, with many businesses, particularly in London, choosing not to accept cash at all. A growing reliance on digital payments, particularly debit and credit card transactions, has further diminished the role of smaller coins. According to figures from UK Finance, the number of cash payments made in 2023 fell to 6.4 billion, a 7% decrease from the previous year and a two-thirds reduction compared to a decade ago. In contrast, debit card payments surged to nearly 25 billion, making up more than half of all transactions in the UK. Despite this decline, the proportion of people relying primarily on cash increased slightly, from 1.7% to 2.6% in 2023.
The Royal Mint has not produced new 2p coins since 2021, and there were no 2p coins minted between 2018 and 2020. A spokesperson from the Mint commented, “The Royal Mint’s core purpose is to make UK coins, and we continue to work closely with the Treasury to meet demand from UK cash centres.”
This announcement comes as the UK’s financial regulator, the Financial Conduct Authority (FCA), unveiled new plans to safeguard access to cash for consumers and small businesses. The FCA intends to use its new powers to compel banks and building societies to identify gaps in cash access across regions and ensure that cash services, such as bank branches and ATMs, remain open until alternative solutions are put in place.
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Sheldon Mills, the FCA’s executive director for consumers and competition, stated, “Three million people continue to rely on cash, even as digital payments become more popular. And many small businesses still need somewhere to safely deposit their takings each day.”
The idea of phasing out 1p coins was first proposed in 2015 by then-Chancellor George Osborne but was abandoned. A consultation in 2018, led by Osborne’s successor, Philip Hammond, also considered the issue but ultimately led to no action. The Bank of England has previously assured that removing smaller coins would not cause inflation, as price rounding would be applied to the total bill rather than individual items, and would only affect cash transactions, which are already a minority form of payment.
Campaigners, however, have voiced concerns over the government’s moves towards a cashless society. They argue that the right to make purchases with cash should remain a fundamental right. Last year, TV channel GB News launched a petition calling for the government to introduce legislation to protect the status of cash as legal tender in the UK until at least 2050. The petition sparked controversy, with media regulator Ofcom warning that it breached guidelines, asserting that broadcasters should refrain from commenting on matters of political or public policy controversy.
As the Treasury reviews its coinage policy, the future of 1p and 2p coins remains uncertain, and the debate over cash’s place in a digital world continues to intensify.
