The government of the United Kingdom has vowed to keep the 1p and 2p coins in circulation despite the declining levels of cash usage in the country.
Today, Philip Hammond, the British Chancellor, announced plans to establish a new group that will aim to safeguard access to cash for Brits. At the same time, he also promised to keep all current cash denominations — from the penny to the £50 note — in circulation.
Hammond stated: “Technology has transformed banking for millions of people, making it easier and quicker to carry out financial transactions and pay for services.”
He added: “But it’s also clear that many people still rely on cash and I want the public to have a choice over how they spend their money.”
The said announcement comes following the speculation that the British Chancellor was set to abolish one and two penny coins. Last year, Hammond called the coins “obsolete” and a Treasury report discovered that only 60 percent of the coins are used in transactions before either being saved or thrown away. Last year, the Bank of England also said that discontinuing the coins will not have an impact on inflation.
The commitment to cash comes despite the warnings that the cash infrastructure of the United Kingdom is on the brink of collapse.
The “Access to Cash” report that was published last March warned that the “dramatic collapse” in cash usage could result in the collapse in the cash network within two years.
Earlier this week, Which?, a consumer group, said that the number of free cash machines in the United Kingdom declined by 1,700 in the first three months of the year. Part of the reason is the high fixed cost of the ATMs — operators have to earn more money from fewer transactions by charging customers for their withdrawals.
Today, the chair of the Access to Cash review, Natalie Ceeney CBE, stated: “Cash use is falling rapidly, but digital payments don’t yet work for everyone. We need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in the digital economy.”