I hate coppers. There is simply no place for them now in UK society, save for some vague nostalgic notion.
With latest fintech revolution in full flight, many (tech) pundits are predicting the end of cash as digital currencies and digital wallets take over. I wouldn’t pop the champagne just yet chaps – we’ve had the means to eliminate cash for decades (credit & debit cards anyone?) but cash still plays a large role in our society.
So what about copper coins? Why am I such a hater…?
Because our society has moved to a point where they are irrelevant. What can you buy today for 1p? Or 2p for that matter?
Back in 1990, responsible governments were looking at the high cost of producing coins (inflation was pretty high then). In Australia and New Zealand, both governments decided to remove the coin from circulation.
You know what happened? Nothing. There were no revolts. No protests in the streets. No panic. No one died. Everyone just moved on.
Around the same time, the UK decided to keep the coin but changed the composition of the coin so it was cheaper to make (they are now made of copper plated steel).
That might have made sense then, but now? What can you buy for a penny?
I’ve not found anything. So what purpose do they have? What relevance is there for a 1p coin in today’s world?
One of the arguments for keeping them is that there is a psychological factor at play with pricing things at say 9.99 instead of an even 10 pounds.
But removing the coin doesn’t magically change all the prices of everything in the shops. This is because if you are paying by an electronic means, you can still pay the exact price of £9.99.
If you are paying cash, then the items are all still priced to the penny and at the end when you go to pay for your goods, the final bill is rounded up or down to the nearest 5p. The net effect to the consumer and retailer is basically zero.
Some of you may be wondering what harm do they do? Here’s a few for you:
- They take up too much room in your pockets.
- They are slow to count out – its not quick counting out the pennies
- You can’t actually buy anything with them
- You can’t legally use more than 20p’s worth in a single transaction!
But here’s the big one – they cost hundreds of millions to mint. The Royal Mint won’t disclose exactly how much (despite a Freedom of Information request). But it will be millions.
Want to know how many 1p and 2p coins were issued into circulation in 2014?
- 1p – 464,801,520 coins!
- 2p – 247,600,020 coins!
Even if the cost to mint each coin was only 1p, we’re still talking a whole lot of money. If it cost 1p to make each coin (not an unreasonable estimate) then the cost last year alone was over £7M. And last year wasn’t even a big year for coin production.
All that money for something that can’t actually buy anything.
That’s a pretty expensive sense of nostalgia, no…?
What else could that money be used for? Which Politician is going to be brave enough to make the sensible recommendation and champion this rather obvious removal of waste?