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Future of 1p and 2p coins questioned by Treasury

Future of 1p and 2p coins questioned by Treasury
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It is inviting comments on the mix of coins in circulation as consumers move to non-cash payments such as contactless and digital spending.

Ministers say there are no current plans to scrap them.

But the consultation hints at the growing cost of handling these coins. It also questions the validity of the £50 note.

"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," the Treasury consultation document says.

Many countries - including Canada, the home of the current Bank of England governor Mark Carney - have ditched their low denomination coins.

The document points to surveys that suggest six in 10 of UK 1p and 2p coins are only used once before being saved in a jar or discarded.

In one in 12 of these cases, the coins are thrown in the bin.

Previously, the government and the Royal Mint have needed to produce more than 500 million 1p and 2p coins each year to replace those falling out of circulation.

However, the coins are now being used less often and being held in greater numbers by coin processing businesses, as consumers move to non-cash payments.
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