1p and 2p coins scrapped: the Royal Mint will produce none of these copper coins in 2024 as demand drops

• The Treasury has not ordered new 1p or 2p coins from the Royal Mint this year, meaning 2024-dated coins will not be produced

• A Treasury spokesperson confirmed that the lack of new orders is due to an adequate supply of these coins already in circulation

• There have been past instances when 1p and 2p coins were not produced, including in 2018

• Despite a decline in cash transactions, a small but growing segment of the population still relies on physical money

• Recent legislation, such as the Financial Services and Markets Act, aims to protect access to cash

• Surveys indicate mixed views on the future of cash, with a significant portion of people still using and depending on cash despite the rise of contactless payments

The Treasury has not ordered any new 1p or 2p coins this year, meaning the Royal Mint will not produce any copper coins bearing the year ‘2024’.

The Treasury requests the Royal Mint to produce coins, which can have life spans lasting decades, to meet the needs of the economy. The number of coins issued into circulation reflects demand levels from UK banks and post offices.

A Treasury spokesperson told The Standard it estimates approximately 27 billion coins are in circulation in the UK. The Mint also has a “buffer stock” of coins to ensure the supply of coins for all denominations remains consistent.

Will 1p and 2p coins disappear?

The Treasury has dismissed claims that 1p and 2p coins are set to be discontinued, after reports indicated that these coins might be nearing their end due to the ongoing decrease in cash transactions.

And there has been speculation in previous years that the Treasury could be paving the way for the end of 1p and 2p coins, after comments were invited on the mix of coins in circulation.

A spokesperson for HM Treasury denied it is the end of the road for the smallest denominations and said the lack of orders simply reflects the fact that there are already sufficient quantities of these coins in circulation.

“We are not scrapping 1p or 2p coins,” they said. “We are confident there are enough coins in the system without the need to order more this year.”

There were several years in the early 1970s and early 1980s when no 2ps were produced with neither 1p or 2p coins produced in 2018. That year, then Chancellor Philip Hammond labelled the coins “obsolete” but pledged to keep them and protect cash a year later.

He said at the time that there would be no changes to the mix of coins and notes, with all denominations – from the penny to the £50 note – remaining in circulation.

And in 2023, legislation was passed as part of the Financial Services and Markets Act, to protect access to cash.

No 1p coins were also minted in 2019, and no 2p coins were minted in 2019, 2020 or 2022, according to figures on the Royal Mint’s website.

Are we heading towards a cashless society?

A recent survey for ATM and cash access network Link indicated that nearly half (48%) of people expect to see a cashless society in their lifetime. But, according to Link’s data, the average UK adult still withdrew around £1,500 from cash machines last year.

Financial Conduct Authority (FCA) research also found that three million people still rely on cash, with lower-income households disproportionately likely to be excluded from digital services.

There has been evidence that, during the cost-of-living crisis, people have been turning to coins and banknotes to help them balance their budgets.

A report issued by UK Finance this week found an increase in the percentage of people mainly using cash in 2023 to 2.6% of the population, from 1.7% in 2022.

The report said small rises in cash payments, against a backdrop of a longer-term decline, “tend to be during periods of economic uncertainty or recession”.

Increases in cash payments were seen following the financial crisis of 2008/2009 and in 2022 as the rising cost of living led some consumers to attempt to reduce their spending.

UK Finance said cash payment volumes returned to their long‑run downward trend in 2023, amid signs of improving consumer confidence. Cash accounted for one in eight (12%) of all payments made in the UK during 2023, down from 14% in 2022.

While some people are heavily dependent on cash, for others coins and banknotes play a much less significant part in their lives, the report found. Nearly two in five (39%) UK adults were living “largely cashless” lives last year.

Contactless payments represented nearly two-fifths (38%) of payments made in the UK in 2023. With the contactless card transaction limit now standing at £100, some people may find swiping their plastic a handy alternative to rummaging in their wallet for cash.

What are your thoughts on the future of 1p and 2p coins? Do you think they’re an essential part of our cash system, or are they becoming obsolete? Share your opinions and join the conversation in the comments section.