World Economy

Calls for 1p and 2p coins to be phased out after no new coins made last year

HM Treasury has revealed that the Royal Mint did not produce any new 1p or 2p coins last year, prompting calls from the Association of Accounting Technicians for them to be phased out altogether.

This is the first time in 47 years that no new 1p coins have been struck and the first time in 37 years that no new 2p coins were made.

We didn’t ask the mint to issue any £2 or 1p/2p coins this past year because there are already enough of these in circulation.

Our coins are of the highest quality and the amount we ask the Royal Mint to produce every year depends on demand from banks and Post Offices.

– HM TREASURY SPOKESPERSON

Pennies

Accountancy body Association of Accounting Technicians called last year for the coins to be scrapped in its response to a Government consultation.

Last year AAT made clear in its consultation response to the Treasury that there is a compelling and rational case to stop producing 1p and 2p coins.

The majority of these coins are used in a only a single transaction before they leave the cash cycle, having been saved in jars or thrown away; the Royal Mint ordinarily need to produce and issue around 500 million 1p and 2p coins each year to replace those falling out of circulation; the cost of production is the same as for higher denomination coins, meaning it is costing more to make and distribute the coin than it is worth.

This simply doesn’t add up, which is why the Government should seriously consider getting rid of these coins.

– PHIL HALL, ASSOCIATION OF ACCOUNTING TECHNICIANS

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