United Kingdom government considers phasing out 1p and 2p coins and £50 notes

George Osbourne

In documents released alongside Philip Hammond's update on the United Kingdom economy, it was revealed the Government wants to know whether the "current denominational mix meets the needs of cash users".

"One thing the Treasury were seeking views on is whether the current denominational mix of coins meets the public's needs".

Australia, Israel, Sweden, Russia and Switzerland have all dumped coins, while even countries that use the euro - such as Ireland and Belgium - have introduced rounding so people don't get 1c and 2c in their change.

In fact, 6 out of 10 of the coins are only used once before either being saved in piggy banks or (in 8% of cases) thrown in the bin. Apparently people really do throw them away, with the the document claiming a twelfth of all copper coins.

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

The government is also considering phasing out £50 notes due to their widespread use in money laundering.

The Treasury document states the UK's highest-value note is "believed to be rarely used for routine purchases".

Government insiders stressed the real target was always the £50 note - given fears they are mainly used in criminal activities.

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

'It is the same issue we had over cheques'.

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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". It is a bad mistake'.

Sarah Coles, personal finance analyst at investment management firm Hargreaves Lansdown, said: "The writing looks to be on the wall for 1ps and 2ps". The sums can add up and can establish a regular savings habit'. Now they are minted in copper-plated steel. Cash was used for 7.2 billion transactions of under £1 in 2006.

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

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

A 2p coin weighs 3.56g - twice as much as a penny.

This means there is a high cost to keeping 1p and 2p coins in circulation relative to their face value and continuing usage, the paper adds.

The Royal Mint needs to produce more than 500 million 1p and 2p coins each year to replace those that fall out of circulation.

60 per cent of coppers are used only once before never being used again.

Beth Fox, 21, who lives in London, said she would miss the one pence and two pence coins if they were to be scrapped.

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