Cash-and-cards review as £50 note and copper coins could go

THE £50 note, 1p and 2p coins could be scrapped as more and more people use their cards or phones to pay for goods.

As people stop using certain types of notes or coins, the government has announced a review into how people use cash and cards.

The report, published on the Treasury website, says two-thirds of people are now making more payments digitally than they did five years ago.

The government says a review should be carried out.

It says that certain coins fall out of circulation, for example, by being placed into savings jars, which means more coins have to be produced at a relatively high cost.

It suggests out of every 1p and 2p coin produced, six are used in a transaction once before they are either put into a savings jar or in 8% of cases are thrown away.

That means the government and the Royal Mint have to produce and issue more than 500 million 1p and 2p coins every year to replace those falling out of circulation.

But as fewer people are using cash for small transactions demand has been reduced.

It means large stocks of coins are being held, which is costing too much, and producing lower-value coins has a relatively high cost.

Businesses are also beginning to phase out small coins by rounding up prices or setting vending machines and other equipment not to take smaller coins.

There is little regular use of the £50 note but still a significant demand abroad.

The notes can be used for money laundering, hidden economy activity, and tax evasion.

The report says: “From an economic perspective, having large numbers of denominations that are not in demand, saved by the public, or in long-term storage at cash processors rather than used in circulation does not contribute to an efficient or cost-effective cash cycle.”

You can have your say about the future of coins and notes until June 5 with full details on the Treasury website.