Downing Street has confirmed that there are no plans to phase out 1p and 2p coins in the UK, despite former U.S. President Donald Trump announcing an end to the production of
pennies in America.
Trump, who made the decision as part of a cost-cutting initiative, declared on his Truth Social platform that the U.S. Treasury would stop minting one-cent coins, which he labeled "wasteful." He argued that producing a penny costs the U.S. government more than two cents, making it an unnecessary financial burden.
However, when asked whether Britain might follow suit, Prime Minister Keir Starmer's official spokesman dismissed the idea. "There's no plan to change our policy on that," he told reporters.
The Future of Cash in a Digital World
The debate over the relevance of low-value coins has intensified as the UK moves towards a more cashless economy. A study by UK Finance found that 39% of British adults lived largely cash-free in 2023. However, cash remains a crucial payment method for 1.5 million consumers—representing 2.6% of the adult population—who primarily rely on it for everyday transactions.
Concerns about the longevity of 1p and 2p coins resurfaced following reports that the UK Treasury had not placed any new orders for general circulation coins from the Royal Mint in 2024. While no official decision has been made to discontinue small denominations, recent figures show that no new 2p coins have been minted since 2021, and none were produced between 2018 and 2020.
The Treasury has reassured the public that the existing supply of coins is sufficient, stating that there are “no current plans to change the mix of UK coins.”
Rising Cash Use Amid Economic Pressures
Despite the overall trend towards digital payments, UK Finance noted a rise in the number of people relying on cash in 2023. This increase, compared to 2022, suggests that more people may be turning to physical money as a way to manage their spending during the cost-of-living crisis.
Meanwhile, in the U.S., Trump's decision aligns with a broader effort to cut government expenditure. The Department of Government Efficiency (DOGE), led by billionaire entrepreneur Elon Musk, reported that each American penny costs over three cents to produce. In the 2022-23 financial year alone, the production of pennies cost U.S. taxpayers an estimated $179 million (£145 million).
Announcing the move, Trump wrote: “For far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the U.S. Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”
While the U.S. has taken a firm step towards eliminating low-value coins, the UK government remains committed to keeping copper coins in circulation—for now. However, as digital payments continue to dominate, the future of the penny in Britain remains an open question. Photo by brismike at Numista, Wikimedia commons.