The UK and the Six: the future of the penny and 2 pence coins

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Over time, all currencies are subject to inflation. As a result, higher denominations are added to the coinage and some lower denominations are removed. The UK added a pound coin in 1983 and demonetised the half penny in 1984. It then added a 2 pound coin in 1997.

In this topic I refer to the UK and the Six. "The Six" is not an official term but an informal invented one. These are the UK and the territories that use the pound. There are three crown dependencies: the Isle of Man, Jersey and Guernsey. Then there are the three relevant British overseas territories: Gibraltar, the Falkland Islands, and St. Helena and Ascension - these two islands use a joint coinage and currency. Each of the Six has its own pound, but these are kept at par with the UK pound sterling.

In recent years in the UK, there has been much discussion about getting rid of the penny and 2 pence coins. Inflation has rendered them rather useless in everyday terms. Meanwhile, some other countries, such as Australia, New Zealand and Canada, which do not use the pound, demonetised their lowest denominations some years ago.

However, the UK chancellor stated in 2019 that the UK penny and 2 pence coins would remain for the foreseeable future. But what about the Six? What have they decided?

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Gibraltar, 2015 set.

In 2015 Gibraltar issued a coin series that included no penny or 2 pence coin.

However, the later series have included those denominations.

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Isle of Man, 2017 set.

In 2017 the Isle of Man also issued a coin series that included no penny or 2 pence coin.

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Isle of Man, 2023 set.

The Isle of Man coin series of 2023 also includes no penny or 2 pence coin.

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In November 2023, after a period of consultation, the Isle of Man decided to allow 1 penny, 2 and 5 pence coins to remain in circulation. The Treasury will, however, continue its policy of not minting any further 1 penny or 2 pence coins, due to the cost of both production and storage.

See:  Isle of Man considers abolishing 1, 2 and 5 pence coins.

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Falkland Islands: circulation coins of 2023.

In November 2023 the Falkland Islands Treasury Department launched a public consultation about the proposal to withdraw the 1 penny and 2 pence coins. The Treasury has at most an 8 month supply of these coins remaining. A combination of global shortages in coin blank materials and the relatively low volume of coins the Treasury typically orders, compared to other countries, means that their provider is unable to source the coin blanks they need from the Royal Mint.

Furthermore, the costs involved in minting these low value coins is prohibitively expensive – far greater than the monetary value of the coins themselves. If the removal of 1 penny and 2 pence coins from circulation is agreed, a rounding system would need to be introduced for cash payments. The rounding system proposed by the Falkland Islands Treasury is known globally as the Swedish Rounding system. Cash transactions would be rounded to the nearest 5 or 10 pence. This rounding system is designed to be fair to both consumers and retailers.

See:  Coin shortage in the Falkland Islands.

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What about the others? Have they made any decisions about these low denomination coins?

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See also: 

Comparing coins from the whole British sterling area

The UK and the Six: coin convergence and divergence