by Leonie Schulze
October 4, 2018 – Most of us do not want to be that one person holding up the line at the checkout. The one frantically rummaging through their wallet in search of 1- or 2-cent coins so they can pay in exact change. Which is why many people have either resorted to telling the cashier and waiter to “keep the change” or own a cup filled with copper coins at home.
Bank of England employees have commented on a possible withdrawal of 1-penny and 2-pence coins in the UK.
While you can still tell yourself that a penny saved is a penny earned, many countries’ central banks do not agree with that. The Bank of England is the latest one to allegedly consider eliminating 1-penny and 2-pence coins. Bank Underground is a blog run by Bank of England employees to express their opinions on current monetary policies. Rumors about the UK removing low denomination coins trace back to this blog.
On August 22, 2018, Marilena Angeli and Jack Meaning assuaged peoples’ worries that such a move would cause inflation by citing numerous studies and charts in an article posted on Bank Underground. They point out that the approach in countries such as Ireland, the Netherlands, and Finland, which have gotten rid of their low-denomination coins, demonstrates that the prices of individual items would not be affected by such a move. Angeli and Meaning assert that “rounding is applied to the final bill, not to individual items.” In addition, “rounding is only applied to cash payments – payments by card or similar electronic means would likely still be charged the exact same amount.”
The production of low-denominations coins has decreased considerably in the UK over the last few years. As is the case in many other countries, these coins are not used very frequently. Their production is not cost-efficient. Nevertheless, The Guardian has reported that Downing Street has no plans to get rid of 1-penny and 2-pence coins.
Will France join the small list of Eurozone countries that have stopped producing 1-cent and 2-cent coins?
Similar news has been reported on the other side of the Channel. The Local quoted a report published by the government think tank Comité d’Action Publique 2022 (CAP 2022) saying that France also plans to abolish 1- and 2-cent coins “as the first step towards creating a zero-cash economy in France.” Worries about a rise in prices are allegedly superseded by an overall approval of getting rid of the smallest denomination coins. As of now, neither the British nor the French government has initiated a concrete plan to abolish these coins. But the UK already scrapped the halfpenny in 1984. Maybe the penny is next.
CoinsWeekly recently published an article on the actual vanishing of small denominations. Numerous articles on the topic of cash and its future in general can be found in our archive section.
While France and the United Kingdom are merely talking about it, Italy actually followed through and has stopped producing 1- and 2-cent coins as of 2018.
If the UK were to abolish the 1-penny and 2-pence coins, Matthew Dent’s 2008 popular design of the Royal Shield spread across six coins would have to be adapted or replaced.
If you need an idea of what to do with your small change, visit the Eurocycleur website (France only) to find out which stores allow you to exchange coins for vouchers.