Britain could be plunged into fresh decimalisation chaos if the Treasury decides to scrap 1p and 2p coins as experts warn millions will end up paying more for their shopping as a result.
On Tuesday, it emerged the Treasury had no plans for more copper coins to be minted in the coming years.
The decision has been heavily criticised, as former pensions minister Ros Altmann warned the cost of many basic items would be rounded up to the higher full pound amount and hit vulnerable older people hardest.
The Treasury’s latest decision is another step towards Britain becoming a cashless society, but many experts believe cash is still a vital asset for millions of people across the country.
Many Brits took to social media to blast the Treasury’s call and feared the axing of the coppers could lead to another Decimalisation ‘D-Day’ – referencing the chaos caused by the UK’s decision to switch its currency system in 1971.
Brits face paying more for everyday essentials on the High Street if the Treasury stops producing 1p and 2p coins (file image)
On Tuesday, it emerged the Treasury had no plans for more copper coins to be minted in the coming years
Many Brits took to social media to blast the Treasury’s call and feared the axing of the coppers could lead to another Decimalisation ‘D-Day’
Writing on X (formerly Twitter), one user wrote: ‘Decimalisation raised prices…every price was rounded up…the loss of 1p and 2p coins would do the same.’
A second posted: ‘Why not get rid of all coins? Round everything up to £1, or better still make it a fiver! After all it worked for decimalisation!’
Another added: ‘The amusing thing about abolish 1p and 2p coins is that it has the effect of reversing decimalisation by stealth, since it would mean than the pound is once again made up of 20 units of 5p each. Maybe Charlemagne was right about coinage after all?’
Fearing the potential price rises, an X account said: ‘The use of cash is important to everyone and without these lower denomination coins it would be a stealth way to increase prices on everything. We need to physically feel and see cash for people to be able to budget for children to learn about money for small business to thrive.’
A fifth user simply put: ‘They are stopping 1p and 2p coins from being made, cashless society soon here.’
Shoppers also shared their agony at the thought of losing so many greatly-loved traditions.
Jo Lake, a ghostwriter from Stockport, said: ‘So the Treasury is considering scrapping 1ps and 2ps.
”[I have] fond memories of saving my coppers (including ha’pennies!) for my weekly 10p mix.’
Blasting the Treasury’s latest decision, former Conservative minister Ms Altmann said: ‘[Removing them from circulation] will just lead to higher prices in the shops. For those on low incomes who use cash, especially the poorest pensioners, every penny counts.
‘The cost of many basic items are often just under a whole pound to make them more attractive but either the prices will be rounded up to the higher full pound amount as change can’t be given or those using cash will have to pay the whole pound which will cost them more.’
Britain converted to decimal currency more than 50 years ago to change the value of the pound to 100 pence.
Prior to this change, there were 12 pennies to the shilling and 20 shillings to the pound.
Brits face paying more for everyday essentials on the high street if Treasury stops producing 1p and 2p coins, business leaders warn
Dismayed shoppers vented their fury on social media after hearing the heart-wrenching news
This currency switch meant the introduction of the 5p, 10p and 50p coin into society and removing ‘old money’ coin such as the tanner, shilling, florin and half crown.
The change was officially introduced on Monday, February 15, 1971, and initially caused chaos across the country – as people struggled to come to terms with the new money concept.
The banks were closed for four days from the previous Thursday to prepare for the change-over and a passionate public campaign ‘save our sixpence’ meant the sixpence coin, worth 2.5p, stayed in circulation until 1980.
Dick Taverne, who was chief secretary to the Treasury a year before decimalisation, told the BBC: ‘There was a passionate public campaign ‘save our sixpence’.
‘People were very fond of the coin. They said it was part of our heritage. It was thought a terrible thing to get rid of the sixpence.
‘I remember in the course of the debate, one of the Labour members screaming ‘But what about the housewife, she is going to miss the sixpence, she is going to be exploited – how dreadful the decision to abolish the sixpence’. It was a very emotive issue.’
On Wednesday night, the Treasury denied it was planning to scrap 1p and 2p completely.
Instead, a spokesman said it was ‘confident’ there are enough coins in the system ‘without the need to order more this year’.
A Treasury spokesperson said: ‘We are not scrapping 1p or 2p coins. We are confident there are enough coins in the system without the need to order more this year.’
Without 1p and 2p coins, practices like this could stop
If the coins are scrapped, this would mark the first such change since 1984 when the halfpenny coin was taken out of circulation
Former pensions minister Ros Altmann warned that scrapping 1p and 2p coins could hurt vulnerable older people
But officials are said to be considering a range of scenarios for the coppers’ future as Britain increasingly becomes a cashless society.
Cash made up just 12 per cent of all payments last year, according to figures published by industry body UK Finance yesterday.
By contrast almost four in ten payments were contactless.
But whilst the data suggests Britons are falling out of love with cash, money experts say it still plays a major role in modern society.
According to the Financial Conduct Authority, the vast majority of the three million household that still rely on cash for day-to-day transactions are from lower income-households.
A person in a low-income household is almost three times as likely to rely on cash, while being unemployed makes an individual almost twice as likely to rely on cash.
Being digitally excluded, which is measured through an individual having low digital capability or poor digital access, makes an individual more than four times more likely to rely on cash than an individual who is not digitally excluded.
Adrian Buckle, head of research at UK Finance, said: ‘There is a huge amount of choice available to consumers in terms of how they make payments, but we can definitely see the continued popularity of debit cards and contactless.
‘Mobile contactless payments are growing fast and one third of adults are now making these at least once a month, with scope for usage to increase further.
‘This doesn’t mean we are on our way to becoming a cashless society. Cash is still the second most frequently used method of payment in the UK, although on the whole we are using it less and more people are leading largely cashless lives.’
Furthermore, a collapse in global computer systems, such as the Microsoft outage last week, leaves the country vulnerable to collapse if it entirely cashless.
The CrowdStrike outage emphasised the vulnerabilities of digital payments systems
John Howells, CEO of cash machine operator Link, said: ‘People continue to choose new ways to pay, and cash continues to be used less. But it remains vital for millions of people – even if the data forecasts that cash will represent only six per cent of payments in a decade’s time – it’s critical if other systems go down as we saw with the outage last week.
‘Despite people moving away from cash, £1.6billion a week is still being issued by our network. We remain absolutely committed to making sure people can access cash free of charge, conveniently, on the high street.’
Finally, getting rid of small coins would ultimately lead to a fuel inflation.
Matthew Lynn, a financial columnist for the Spectator, explained: ‘For many retailers, 99p, £1.99 and so on were a barrier they were reluctant to cross.
‘If those pennies don’t exist anymore then you might as well round up the price to something far larger. The 1p coin may not seem very useful right now, but we will miss it more than we realise when it is gone.’
If the coins are scrapped, this would mark the first such change since 1984 when the halfpenny coin was taken out of circulation.
The decision, by then chancellor Nigel Lawson, was made when the coin became more expensive than its value to mint.
Latest Royal Mint figures show no new 2p coins have been minted since 2021 when 118 million were produced. The most recent 1p coins were made in 2022, when 30 million were produced.
The Royal Mint said: ‘We continue to work closely with the Treasury to meet demand from UK cash centres.
‘We seek agreement from the Treasury to manufacture coins to meet demand as required, and we have a buffer stock of coins to ensure a consistent supply.’
The decision has been heavily criticised, as former pensions minister Ros Altmann warned the cost of many basic items would be rounded up to the higher full pound amount and hit vulnerable older people hardest.
The Federation of Small Businesses, also warned that card providers could charge higher prices if consumers have less choice over how to pay.
A number of people on social media have also raised their concerns about the impact decimalisation – the conversion of a currency to units related by powers of 10 – could have on their bills.