The humble 2p coin and gleaming £2 coin will not get an upgrade for at least 10 years.
It is not in the Royal Mint’s agenda to produce new versions of the coins within the next decade. This is due to a reduced need for coins, compared to banknotes.
A report on the future of cash by the National Audit Office (NAO) reveals that it may be more challenging to get hold of the time-honoured coins.
It informs that the authorities were unaware of the rise of digital payments, which poses a risk to those who rely on cash.
A decade ago, cash was used in 60% of payments, in contrast to less than 30% of payments by 2019.
The NAO claims that this drop is due to coronavirus.
Despite the downswing in cash use, there is still a puzzling demand for coins and banknotes.
Banknotes, especially, have been on the increase and there is little or no knowledge of the bearings of £50bn worth of notes in circulation.
They are not used in transactions or kept as savings, but may be abroad, concealed in homes unidentified or being used in the “shadow economy”.
The Royal Mint has reduced the production of coins. Nevertheless, supplies of every coin in circulation are overreaching its targets. The stockpile for £2 coins is 26 times above its target.
A spokeswoman of The Royal Mint said it is possible for 2p and £2 coins to be mass-produced again if needed.
“We constantly monitor the demand for coins from the banks and Post Offices, and seek permission to manufacture more from HM Treasury,” she said.
There has not been a need for these coins, owing to the resurgence of quantities of old coins in circulation. This was triggered by the initiation of the 12-faceted £1 coin in March 2017.
Everybody had to hand in their old pounds to their banks in six months.
Old and poor ‘left behind’
The NAO identified problems concerning access to cash, thanks to the 17% of cash machines closing down in two years.
Older and lower-income purchasers were inclined to use cash more.
“Cash use might be declining overall but it remains a vital part of millions of people’s lives – particularly for some of the most vulnerable in society,” said Meg Hiller, who chairs the influential Public Accounts Committee in the House of Commons.
“The government took its eye off the ball and too many people already have to go out of their way to get their hands on cash.
“It and the regulators will have to hurry to catch up with fast-moving technology, or even more people could be left behind.”
Although the government is under a legal obligation to preserve access to cash, the NAO cannot see this happening.
Gareth Davies, head of the NAO, said: “The approach is fragmented, and it is not clear that the action being taken will keep up with the pace of change.
“As society progresses towards the wide use of digital payments, the use of cash in transactions is dwindling. It may become harder for people to access cash when they need it and those without the means to pay digitally will struggle if cash is not accepted.”