The Royal Mint has left millions of unwanted 1p and 2p coins languishing in warehouses across Britain, as speculation mounts over the future of copper coins. According to industry data, approximately 260 million surplus copper coins, worth around £4 million, are accumulating in cash centres nationwide. This staggering figure includes roughly 150 million 2p coins, accounting for two-thirds of the total 225 million in the UK, and 110 million of the 200 million 1p coins minted.
The sheer volume of surplus cash is so immense that it is equivalent to more than 2,000 washing machine-sized cages, each weighing a tonne, filled to the brim with coins. Remarkably, more copper coins are now stored in these warehouses than are currently in circulation. Surveys indicate that over half of the 1p and 2p coins entering circulation are used only once before ending up in a jam jar or storage, while one in 12 are discarded entirely.
The Royal Mint, responsible for producing British coins, has not recycled or melted down surplus coins since the closure of its smelting facility more than a decade ago. Unlike the Bank of England, which exchanges damaged or mutilated banknotes from the public, the Royal Mint only accepts damaged coins collected by banks.
The Treasury has not instructed the Royal Mint to produce any new coins this year, amidst reports suggesting that no new 1p and 2p coins are expected to be minted for the next few years. Despite the Treasury’s assurances that it has no plans to alter the mix of UK coins in the system, estimated at 27 billion in circulation, the Royal Mint data reveals a sharp decline in the minting of copper coins. In 2022, only 30 million 1p coins were minted, and none in 2023. Similarly, no 2p coins have been minted since 2021, a stark contrast to the billion pennies minted in 2000.
The industry remains committed to the sustained use of cash, but emphasises the need to ensure the right mix of notes and coins that people want to use. Discussions about recycling some of the current coins in circulation are also gaining traction. Previous chancellors have considered scrapping copper coins, with Philip Hammond launching a consultation in 2018 after branding them obsolete.
However, consumer choice remains a significant factor, and the Treasury estimates that over 500 million 1p and 2p coins need to be issued each year to replace those falling out of circulation. Supporters of copper coins argue that their removal could lead to price increases, as retailers would likely round prices up to the nearest 5p. Additionally, cash remains the second-most-popular payment method after debit cards, with an estimated 3 million people still relying on it.
The penny, first produced in the 8th century, is the oldest British denomination still in use today, adding historical significance to the debate surrounding its future. As the fate of copper coins hangs in the balance, the mounting piles of unwanted 1p and 2p coins in warehouses across the UK serve as a stark reminder of the challenges facing the nation’s currency system. The Royal Mint, the Treasury, and industry stakeholders must navigate this complex issue while considering the needs and preferences of consumers in an ever-evolving financial landscape.
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