Treasury accused of 'killing cash' despite promise to not scrap coins: 'This will impact consumers!'

This comes amid widespread concern about access to cash services amid changing consumer behaviour and a wave of bank branch closures.

However, a Treasury spokesman has confirmed smallest denominations will stick around with the lack of orders being down there being many coins in circulation.

They explained: "We are not scrapping 1p or 2p coins. We are confident there are enough coins in the system without the need to order more this year.”

Any orders for new coins issued into circulation are reflective of the level of demand coming from banks and the Post Office.

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Despite the Treasury's attempt to ease concerns over cash access, activists remain not convinced over the trajectory of the future of payments.

Martin Quinn, the campaign director for the Payment Choice Alliance, outlined what he believes is at stake.

He explained: “This is another slow way of killing cash, the phasing out of bronze money one and two pence coins will lead to prices being rounded up, not rounded down.

"This will impact prices for consumers, who have already had to deal with high price inflation and a cost of living crisis.”

Responding to Treasury requests, the Royal Mint issues coins and determines how many are placed into circulation.

In a statement, the organisation said: "The Royal Mint’s core purpose is to make UK coins, and we continue to work closely with the Treasury to meet demand from UK cash centres.”

In 2018 and 2019, no 1p coins were minted while no 2p coins were created between 2018 to 2022.

No 1p coins were minted in 2018 or 2019 and no 2p coins were minted in 2018, 2019, 2020 or 2022, according to figures on the Royal Mint’s website.

There has been speculation in previous years that the Treasury could be paving the way for the end of 1p and 2p coins, after comments were invited on the mix of coins in circulation.

This week, the Financial Conduct Authority (FCA) set out new plans to protect peoples' access to cash which will come into effect from September 19.

These include introducing more banking hubs, ATMs and Post Office services across the country.

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A report published by UK Finance found an increase in the percentage of people mainly using cash in 2023 to 2.6 per cent of the population, from 1.7 per cent in 2022.

Based in this study, the small hikes in cash payments "tend to be during periods of economic uncertainty or recession".

Cash payment increases were witnessed after the Great Recession in 2008/09 and during the cost of living crisis.

According to UK Finance, cash payment volumes returned to their long‑run downward trend in 2023, amid signs of improving consumer confidence.