No orders for new coins intended for general circulation have been sent by the Treasury to the Royal Mint this year, the Standard can reveal, in a historic first for the UK’s money maker.
As part of an active review into the denominational mix of UK coinage, officials are understood to be considering a range of scenarios including the possibility of scrapping 1p and 2p coins altogether amid a continued decline in cash transactions.
The Treasury has not placed an annual order for any coins with the Royal Mint and does not expect to order any new 1p and 2p coins to be minted in the coming years. Proposals for the two coins, which have not been finalised, are set to be put forward for discussions with ministers over the future of UK coinage.
In a statement a HM Treasury spokesperson said: “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.”
The potential move, which could result in the denomination of cash payments into multiples of 5p, would be the biggest shake-up to Britain’s currency since decimalisation was introduced in 1971. A coin has not been scrapped in the UK since the half-penny coin ceased to be minted in 1984, while 1p and 2p coins have switched from being made of copper to bronze to avoid their scrap value significantly exceeding their nominal cash value.
Cash payments have declined rapidly as a proportion of total payments made in the UK, a transition which was sped up by the pandemic as more and more Brits turned to online shopping. Many shops, bars and restaurants across London have stopped accepting cash payments altogether.
The number of cash payments made in the UK fell to 6.4 billion in 2023, down 7% compared to the previous year, and a fall of more than two-thirds compared to a decade ago, according to figures released today by UK Finance, while debit card transactions rose to just shy of 25 billion, accounting for more than half of all payments. However, the share of the population mainly using cash rose slightly from 1.7% to 2.6% during the year.
New 2p coins have not been minted since 2021, according to the most recent figures disclosed by the Royal Mint, while none were made between 2018 and 2020. The Royal Mint said in a statement: “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.”
It comes as the UK’s financial regulator today laid out plans to protect access to cash for consumers and small businesses.
The Financial Conduct Authority said it was using new powers given to the watchdog to force banks and building societies to assess gaps in access to cash across regions and keep facilities, including bank branches and ATMs, open until additional cash services become available.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “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.”
Plans for the scrapping of 1p coins were first mooted in 2015 by then-Chancellor George Osborne, but were subsequently abandoned, while his successor Philip Hammond launched a consultation into the move in 2018 before deciding not to take action.
The Bank of England has previously said the removal of copper coins would not have an inflationary impact as the effect of price rounding to the nearest 5p “would be applied at the total bill level, not on individual items and it would only affect cash transactions, which make up a low proportion of spending by value.”
Campaigners have pushed back against moves to speed up the transition towards a cashless society, arguing that the ability to make a purchase using cash should be a fundamental right. Last year, upstart TV channel GB News led a petition to demand that the government introduce legislation to "protect the status of cash as legal tender and as a widely accepted means of payment in the UK until at least 2050." Media regulator Ofcom said the campaign was a breach of its media guidelines, adding that broadcasters should not express views on "matters of political and industrial controversy or current public policy".
