- Small denomination coins could be phased out under plans being considered by the UK government.
- 60% of small coins are used once before being put in piggy banks or thrown away.
- £50 notes could also be phased out in plans to tackle money laundering.
LONDON – The UK government is considering phasing out 1p and 2p coins, as well as £50 notes, in a bid to tackle tax evasion, money laundering and waste.
The Chancellor Philip Hammond has begun consulting the British public about whether to phase out the denominations over the coming years as part of a move towards digital payments.
The Treasury published a “call for evidence” on the proposed changes on Tuesday, saying that currently most small denomination coins are only used once before being put in piggy banks or thrown away.
“Surveys suggest that six in ten 1p and 2p coins are used in a transaction once before they leave the cash cycle,” the document states.
“They are either saved, or in 8% of cases are thrown away.”
The government is also considering phasing out £50 notes due to their widespread use in money laundering.
“The £50 note is believed to be rarely used for routine purchases and is instead held as a store of value,” according to the Treasury.
“There is also a perception among some that £50 notes are used for money laundering, hidden economy activity, and tax evasion.”
The possibility of withdrawing £50 note has been denied in the past by the Bank of England. Last year the bank’s chief cashier Victoria Cleland told Business Insider that they were not contemplating withdrawing them from circulation.