Are you fed up of always having so much small change weighing down your pockets? Should the UK get rid of 1p and 2p coins? Cashfloat presents both sides of the debate…
- Why the UK should get rid of 1p and 2p coins
- Pros of keeping 1p and 2p coins
- How coins are part of our cultural heritage
Should the UK Get Rid of 1p and 2p Coins?
The Treasury has asked for the British public’s views on whether the 8 sterling coins and 4 banknotes which are currently in circulation meet their needs. This consultation will continue until June 2018. One of the suggestions which drew the most responses was whether they should get rid of 1p and 2p coins like they did with the 1/2p coin (which was withdrawn in 1984). In this article, we will take a look at the pros and cons of banning the 1p and 2p coins.
Why Withdraw 1p and 2p Coins?
The suggestion to get rid of 1p and 2p coins in the UK is part of the ongoing dialogue about how more and more Britons are replacing cash payments with digital or mobile banking. According to UK Finance, in 2006, 62% of financial transactions were made in cash, but 10 years later this had dropped to 40%. They predict that by 2026 only a fifth (21%) of payments will be made in cash. With this trend in mind, some people question the necessity for low denomination coins.
Another reason why the UK should get rid of 1p and 2p coins is because they may no longer be needed. 6 in 10 1p and 2p coins are only used once before they’re put in a jar or discarded. In fact, it’s calculated that 1 in 12 are thrown in the rubbish. As a result, the Royal Mint has to produce 500 million of these coins every year to replace the coins removed from circulation. The Treasury has said this is neither efficient nor cost-effective as their production and distribution costs are higher than the coins’ value.
The 8 Uses of 1p and 2p Coins
Critics of these coins also point to other countries, such as Australia or Canada, which have already discarded their low denomination coins. Shouldn’t the UK, they argue, follow their example? Are they right? Are 1p and 2p coins really necessary? Below is a list of gains of having 1p and 2p coins still around:
- Payments in Cash
- Coins as Educational Tools
- Pennies as Part of our Cultural Heritage
- Fun & Games with Coins
- For DIY Projects
- In Flower Arranging
- In Baking
- Charity Donations
Although cash payments have undoubtedly decreased over the last decade, an estimated 2.7 million Britons still rely solely on cash, many of whom earn £15,000 or less a year. This is especially true for villages. Some consumers have said that they use these coins for payments, especially in supermarket self-service checkout machines.
Although no one is fooled by the psychological trick of setting prices with a 99p at the end, what would happen if these coins were abolished? Retailers would have the choice of rounding up or down. What are the chances that they would drop prices to ones ending in 95p? Would there be inflated prices across the board because of this?
1p and 2p coins are ideal for teaching young children how to count and to add up. Encouraging children to save their small cash in a piggy bank is an ideal way to teach them the truth of the popular saying: ‘Look after your pennies and leave the pounds to look after themselves’. Training children to save money can help them prevent seaching for cash advance lenders when they grow up, since they will know how to manage their money more effectively. This leads us on neatly to our next point…
‘Penny-pinching’, ‘In for a penny, in for a pound’ and ‘See a penny, pick it up…’ are just a few of the popular idioms and sayings that enrich the English language. Defenders of these coins argue that we need to keep our connections with our past.
Many of the traditional seaside amusement arcades use smaller denomination coins. The most popular must be the ‘penny falls’ or ‘penny cascades’ game, which uses 2p coins and allows people to play for hours. A 5p coin would be just too small while a 10p coin would work out as far too expensive to play for long.
Apart from being an essential part of day-trips to the seaside for many Britons, pennies can also be used in the traditional penny-pitching game. The object of the game is to flick 1p coins off a wall so they land on your opponents’ coins (which you then keep). With so many parents now complaining that their kids spend too long on electronic devices, maybe it’s time to teach them such games?
If you’re playing cards for money at home among family and friends, 1p and 2p coins make the ideal stake. If the lowest denomination coin was 5p, your possible losses would immediately become much higher.
Some DIY enthusiasts swear by the practicality of replacing a screwdriver with a 1p coin for those small, fiddly slot-headed screws.
Other DIY enthusiasts are much more ambitious with their projects. They have the patience and the time to glue 1p and 2p coins to floors, walls or shelves to make an alternative decorated surface.
Some people put a 1p or 2p coin in their vases to keep their cut flowers fresh for longer. Although these coins are now only copper-covered, this element is enough to keep the blooms from wilting.
To avoid a soggy pastry bottom, you can pre-cook the pastry crust. This technique, known as blind baking, involves lining the crust with scrunched-up parchment and weighing it down with pennies.
It’s true that if you collect too many 1p and 2p coins, they can weigh down your purse or pocket. As a result, many Britons collect these coins to use as charitable donations. How much would charities lose out every year if people could no longer do this?
Conclusion – Will We Keep our Pennies?
It seems inevitable that the UK should get rid of 1p and 2p coins. If not after this consultation, then in the near future. Already the 2p coin is worth less than the 1/2p coin when it was abolished, after allowing for inflation. However, like shillings and sixpences, they will live on in popular literature, nursery rhymes and idioms. On the other hand keeping 2p and 1p coins can help children learn the importance of saving better and help them prevent taking short term loans UK when they grow older.