Would you be happy to see 1p and 2p coins scrapped?

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Alongside this week’s Spring Statement, the Chancellor Philip Hammond released a paper which discusses abolishing 1p and 2p coins as well as the £50 note.

The rational is that coppers are hardly ever used more than once and end up sitting in savings tins around the country and in fact when the new £1 coin came out it acted as a catalyst for savers to empty their coin jars returning millions of coppers into circulation. Surveys suggest that six in ten 1p and 2p coins are used in a transaction once before they leave the cash cycle. An amazing 8% of pennies are simply thrown away and never seen again they are perceived as such low value.

The effects would be far reaching however, there would be nothing to stop online retailers still charging in penny increments and indeed when invoices are calculated in percentages (such as your marketplace bill) there would be no appetite for retailers to see 5p increments or for the marketplaces to have to round down to the nearest 5p as that would cut their incomes too.

When paying by card penny increments would also never be an issue, so retailers could still keep the favoured £9.99 style prices rather than adapting to £10.00 or perhaps £9.95. The only time this would become an issue is for in person transactions where giving change from a tenner for a £9.99 item would either mean donating an extra 4p to the customer or being unable to give them their penny.

The government point out that the cost of industry processing and distributing low denomination coins is the same as for high denomination coins, making the cost high relative to face value and utility.

At the same time as discussing the end of 1p and 2p coins in our change, the government is considering withdrawing the £50 note as they are rarely used for day to day transactions.

With the rise of digital payments, cash is used less and less as contactless takes over, but still some 2.7 million people are entirely reliant on cash and a further 45 million use some combination of cash and alternative payment methods. However some of the poorest in society – those with annual incomes of less than £15,000 still reply predominantly on cash for day to day spending.

Would you be happy to see the end of 1p and 2p coins – both in your business and in your personal life? Would it affect your pricing policies or, at least for online, would you still price in penny increments?

6 Responses

  1. they trot this horse out every few years and never actually ride it.

    the amount of time wasted discussing it, by people getting paid to discuss, then do nothing about it, would probably cover any shortfall they’re talking about.

    our currency is decimal, until that changes you need to be able to actually make any whole, valid value. which you simply cannot do without pennies.
    – you could do without the 2p, that one is redundant, but you can’t get rid of both.

    alternatively you can admit its all just monopoly money “who cares if you cant get right change in the shop? that’s poor people problems.” and watch the exchange rate collapse.

  2. I don’t want to see a “cashless society” (maxiumum control for the banks etc). I’m suspicious that the £50 was added in with the 1p and 2p argument.

  3. More realistic to get rid of 2p, 5p and perhaps even 10p.

    upto 10p in 1p coins is not that much of an inconvenience.

  4. Much like Stephen above, I see a reduction in coin range possible, but I would suggest 2p, 20p and £2 coins.

    No one seems to like the £2 coin and they are in short supply anyway,

    2p’s…….not many things end in 98, ie £1.98, £3.98 and 2 x 1p is easy enough

    20p’s can readily be replaced / made up with 2 x 10p.

    Unless an urban myth, i think things like £1.99 where priced up such that tills had to be opened to get the change, the Brits want their change, even the 1p (look after the pennies and the £1’s look after themselves etc). This was way back in the day before the advent of barcodes and scanning tills etc.

  5. got to keep the 2p, last thing i want is the kids wanting to go 10p pushers at the seaside. would cost an arm and a leg!!

  6. I like the 1p, 2p, and 5p coins. When I was at uni as a mature student, the majority of young students didn’t like them and used to throw them away on campus, so then I used to go around picking them up. Most days that activity used to pay for my dinner: their loss my gain. Call me a miser if you want but looking after the pennies really does take care of the pounds.
    Another thing is, low value coins are invaluble at places like car boot sales and craft fairs. A lot of people actually make their living selling at these places and would loose out if they were all scrapped.



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