After more than 50 years in circulation, countries around the world are phasing out their lowest denomination coins. Canada eliminated its penny in 2013, Australia followed suit, and now the conversation is turning to the UK's 1p and 2p coins. The Royal Mint reports declining usage and rising production costs are forcing a serious debate.
Why now?
The 1p coin costs more to make than it's worth—about 3p per coin. With most transactions going digital and many Britons leaving pennies in jars or tossing them in drawers, the coin may have simply outlived its usefulness. The Treasury estimates there are over 10 billion 1p and 2p coins in circulation, many sitting idle.
What other countries have done
Several nations have already eliminated their smallest coins:
- Canada (2013): Eliminated the penny. Cash transactions are rounded to the nearest 5 cents.
- Australia (1992): Phased out 1c and 2c coins, followed by New Zealand.
- Sweden: Has largely moved to a cashless society with minimal coin usage.
- Eurozone: Finland and the Netherlands have stopped using 1c and 2c euro coins.
The rounding effect
For cash purchases, totals would be rounded to the nearest 5p. Studies from Canada and other countries show rounding has a negligible impact on consumers—over time, the rounding up and down evens out. Digital payments and card transactions would remain unaffected.
A digital future
The potential demise of the penny is another sign of the shift toward digital payments. Today, more than 50% of UK transactions are cashless, and contactless payments continue to rise. While coins and notes won't disappear overnight, the trend is clear across all our global markets.
What to do with your penny jar
If you've got a jar of 1p and 2p coins gathering dust, here are some ideas:
- Deposit them at your local branch—many have coin counting machines for members
- Donate to charity—many organisations welcome coin donations
- Use them for small cash purchases before any potential changes
- Take advantage of our coin deposit service at any of our global branches
At Unity Oak Trust, we accept coin deposits at all our branches across the UK, USA, Germany, France, and Brazil. Visit any location to deposit your coins or open a savings account today.