Surveys suggest that more than half of 1p and 2p coins that enter circulation are used once before ending up in a jam jar or storage, while one in 12 are thrown in the bin.
The Royal Mint, the official maker of British coins, has not recycled or melted down surplus coins since it closed its smelting facility more than a decade ago.
Unlike the Bank of England, which swaps damaged or mutilated banknotes from the general public, the Royal Mint only accepts damaged coins collected by banks.
The Treasury has not instructed the Royal Mint to make any coins this year amid reports that it did not expect to order any new 1p and 2p coins to be minted for the next few years.
It has previously said it has “no plans” to change the mix of UK coins in the system, of which there are estimated to be 27bn in circulation.
Royal Mint data show 30m 1p coins were minted in 2022 and none in 2023. There have been no 2 pence pieces minted since 2021. By contrast, more than a billion pennies were minted in 2000.
UK Finance declined to comment on the coin data but a spokesman said: “The industry is committed to the sustained use of cash. However, we really need to make sure that we have the right type of notes and coins that people want to use. And we should be thinking about how we might recycle some of the current coins in circulation.”
A spokesman for The Royal Mint said: “The Royal Mint only accepts damaged circulating coins. These are processed to ensure the value of the metal can be recovered.”
Previous chancellors have considered scrapping copper coins. Philip Hammond launched a consultation in 2018 about the mix of coins in circulation after branding copper coins “obsolete”.