Downing Street signals 1p and 2p coins will be spared the axe

1p and 2p coins could be scrapped under new Government plans

Could we soon be saying goodbye to 1p and 2p coins

"From an economic perspective, having large numbers of denominations that are not in demand, saved by the public, or in long-term storage at cash processors rather than used in circulation does not contribute to an efficient or cost-effective cash cycle". Apparently people really do throw them away, with the the document claiming a twelfth of all copper coins.

It seeks to gather evidence to inform that debate, by exploring how the government can support digital payments and ensure that the ability to pay by cash is available for those who need it, whilst cracking down on the minority who use cash to evade tax and launder money.

Copper coins and £50 notes could be scrapped as people's cash habits change.

Aside from taking them to the bank to swap for proper cash, when was the last time you actually paid for something with some copper coins?

Cash has fallen from being 62% of all payments by volume in 2006 to 40% in 2016, and is predicted by industry to fall to 21% by 2026, the document said.

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However, with research suggesting that there are 2.7 million people across the United Kingdom who are entirely reliant on cash, the government is keen to stress that it will support the payment method through ATM access.

However, the consultation goes on to question whether the current denominational mix of eight coins and four banknotes meets consumers' and businesses' current and future needs. "There is a significant overseas demand for £50 notes, with the notes used for some transactions, but mainly held as a store of value alongside other currencies such as the dollar and euro". Any loss of that confidence would carry "extremely high" costs. The document also notes that people associate the £50 note with money laundering, tax evasion, and criminal activity.

Sarah Coles, personal finance analyst at investment management firm Hargreaves Lansdown, said: "The writing looks to be on the wall for 1ps and 2ps".

"A sharp decline in the use of low-value coins and a surge in contactless card and phone payments has prompted the rethink", The Daily Telegraph reports.

The consultation closes on 5 June 2018.

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