Penny coins could be scrapped amid rise in contactless payments

Penny coins could be scrapped amid rise in contactless payments

THERESA MAY yesterday rushed to save 1p and 2p coins - after Treasury plans to bin them sparked uproar.

'One thing HMT were seeking views on was whether the current denominational mix of coins meets the public's needs, and from the early reaction it looks as if it does'.

In the document the Treasury published on Tuesday there were some fascinating nuggets of information about how cash has fallen out of fashion in 21st century Britain, especially with the younger generation, so-called "millennials".

"They are either saved, or in eight percent of cases are thrown away", says the Treasury report.

"With falling long-term demand over time, structural surpluses of some denominations of coin may be generated".

As such, the government said it needs to balance the ability to pay by cash while cracking down on the minority who use cash to evade tax and launder money.

But it says the cost of industry processing and distributing low denomination coins to make up for those taken out of circulation is the same as for high denomination coins, making the cost high, relative to face value and utility. "The £50 note is believed to be rarely used for routine purchases and is instead held as a store of value", said the Treasury.

The document also appeared to pave the way for scrapping £50 notes, noting the "significant" overseas demand the perception that they are used for money laundering, tax evasion and other criminal activities.

But Tory MP Ian Liddell-Grainger told MailOnline: 'A lot of charities live for those pennies.

Caroline Lucas, the Green co-leader and MP for Brighton Pavilion, said: "I do think it would be a great shame to lose our 2p machines on the pier - and wonder if the government hasn't just found another way to ruin peoples' fun".

But No.10 indicated that 1p and 2p pieces were here to stay.

A year ago a bill was introduced in the US Congress which would have abolished the one cent coin.

"Technology has revolutionized the way people shop, sell, and save, and people are increasingly moving away from using cash".

Australia, Canada and Switzerland removed their lowest denomination coins after inflation ate into their value.

Because so many copper coins vanish out of circulation the Royal Mint has been forced to produce and issue more than 500 million 1p and 2p coins every year to replace those which have been thrown away or ended up in piggy banks.

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