The Royal Mint is set to go more than a decade without producing any new 2p or £2 coins after cash usage slumped over the last 10 years and the country handed back its old change, an official report claims.
In March, the Royal Mint was sitting on 26 times as many £2 coins as it needed to, six times as many 1p coins and eight times as many 2p pieces, with all its excess coins worth around £89million.
Figures provided to a National Audit Office report into Britain’s cash usage found the number of coins produced each year by the Llantrisant, South Wales, based Royal Mint fell by nearly two-thirds between 2011 and this year.
The 1p and 2p coins were saved from the smelter last year following a government consultation, but production of coppers remains low according to a new report
At the start of the last decade it struck 1.1billion UK coins, but this plummeted to 383million as consumers increasingly opted for card and contactless payments.
Less than a quarter of all payments were made by cash last year, according to figures released in June by the banking trade body UK Finance, while there are predictions this could fall to fewer than one in 10 by 2028.
This was even before the coronavirus led to fears cash usage, vital for millions, could plummet further as more and more businesses ask customers to pay by card or with contactless.
But the NAO’s report also found the virus could potentially be the saviour of Britain’s smallest coin, saved from the smelter last year along with the 2p after the Government decided against axing the coins following a consultation.
The Mint has not produced any 1p or 2p coins since 2017, while it has not released any new £2 coins into circulation since 2016
The Mint told Britain’s spending watchdog that there had been ‘sharp increases in demand’ for change ‘as many businesses and consumers hoarded coins in the early months of the pandemic’.
As a result, the Treasury ordered the Mint to strike 60million additional 1p coins over the summer to meet this new demand.
Check your change!
While the Royal Mint never released Britain’s last round £1 into circulation in 2016, collectors might be keen to know that the commemorative version, which it sold for £10, is possibly the rarest coin out there.
Although uncirculated coins tend to be worth less in experts’ estimations as they can simply be bought, the Mint’s own figures revealed the regular brilliant uncirculated last round £1, released in 2016, was struck just 96,089 times.
This makes it more than twice as scarce as the circulated version of the 2009 Kew Gardens 50p, which was struck 210,000 times and often sells for upwards of £100.
But the same cannot be said for either the 2p or the £2.
Britain’s coin maker is required to forecast the demand for small change to ensure it keeps enough coins in stock but does not make either too few or too many, but the NAO found that in recent years it had been ‘unable to anticipate significant fluctuations in consumer behaviour’.
Its coin stocks, which it holds on behalf of the Treasury, have been massively swelled in recent years after the introduction of the new 12-sided £1 coin in 2017 led to huge numbers of coins of all kinds being handed in.
With the companies which provide Britain’s banks and other financial firms swamped with change following the recall of the old round £1 three years’ ago, the number of coins the Mint needed to deliver to them fell nearly nine-tenths and the number sold to the Treasury by 806million coins.
As a result, the Mint’s own stock of coins remains far above where it needs to be.
At the end of March, it aimed to hold 700,000 £2 coins, but actually held 18.7million. And rather than holding its target of 15.9million 2p coins, it held 127.1million.
The NAO said the Mint had told it in March that ‘it did not envisage producing any new 2p or £2 coins for at least 10 years’, and that it has cut the number of staff employed in UK and overseas coin-making by 22 per cent to 351.
Due to a mass return of coins in 2017 following the release of the new round £1, the Mint was found in March to be sitting on 26 times more £2 coins than it needed to
According to the latest publicly available figures, which run up to 2018, the Royal Mint has not produced any £2 coins since 2016, when six designs including five commemorative ones were released into circulation, while it has not produced any 1p or 2p coins since 2017.
However it did recently release a commemorative £2 coin, available for £10, marking the 100th anniversary of Agatha Christie’s first novel, The Mysterious Affair at Styles, featuring Belgian detective Hercule Poirot.
The Mint is still releasing commemorative £2 coins though, including this one marking the 100th anniversary of the first novel of Agatha Christie
2017 was the first time no 1p coins had been struck since 1972, while 2p coins had been produced every year since 1984
This is Money contacted the Mint about the NAO’s report and whether its March forecast was still accurate, but did not receive a response.