Pennies are everywhere in my house. At the bottom of my purse, rattling around money boxes and hiding in pockets. Would we miss them if they were gone?
Despite 1p and 2p coins turning my flat into a copper mine, I can’t honestly remember the last time I used a 1p coin to buy something.
I’m not alone in this. Research by the Treasury found that six in ten pennies were only used once in a transaction, then stashed away or lost. In fact, rather shockingly, one in 12 are thrown straight in the bin.
With that in mind, how much would we be affected if the coins were demonetised?
Do we need 1p and 2ps?
If the UK was to hold on to its small denominations, it’d be bucking a global trend.
More than 21 countries have scrapped their equivalent of the 1p or 2p, including Ireland, Australia, New Zealand and Canada. Indeed, in Australia the metal from the melted-down coins was made into bronze medals for the 2000 Sydney Olympics.
Due to inflation, the penny’s spending power is decreasing every month. It’s now worth less than the half-penny was when it was scrapped in 1983.
So, is it even worth having a 1p or 2p coin?
Costing a pretty penny
You might care more about copper if you paid £2 for a £1.97 purchase, and received no change. What shopkeeper, after all, wouldn’t choose to round up rather than down?
Rounding up may be most worrying for those who are already vulnerable. People on lower incomes tend to rely more on cash for their day-to-day essentials. When you’re literally watching every penny, even a tiny increase can hurt.
Then again, analysis by two Bank of England economists suggests prices are unlikely to rise across the board – and experiences overseas seem to bear this out.
People using cards would still pay the sticker price, while those buying more than one item will only have the total rounded up or down. The change we receive from pennies is a tiny proportion of our total spend – so most of us wouldn’t see much difference in our day-to-day expenses.
Loose change for charity
Charities that rely on coin donations have also warned against scrapping pennies – last year alone, we donated over £320m in loose change, according to one survey.
Of course, people may just continue emptying out their coin purses, which could even increase donations if 5ps or 10ps are given instead.
If the penny were to vanish, would you miss it? Or is minting a coin that’s rarely used the very definition of penny-wise but pound-foolish?