The Royal Mint has confirmed that it will not be making any new £2 or 2p coins until 2030 at the earliest.
The announcement came after a report from the National Audit Office said that the Mint was storing surplus coins way beyond the Treasury’s target buffer.
The report explained: “While the storage cost of the excess stocks is relatively small, the Mint’s production of UK coins will be reduced over the next decade as it balances maintaining production capability with steady stock reduction.”
The excess number of coins in circulation covers all denominations. Holdings of 1p and 2p coins are six and eight times above their buffer targets respectively with £2 coins calculated to be 26 times over target.
The surplus is being attributed to the decline in cash payments, a trend that’s been accelerated by changes impacting all aspects of retail during Covid.
Figures from the National Audit Office show a 59 percent decline in the volume of cash payments between 2008 and 2019 with experts predicting the number of cash payments falling to one in ten before the end of the decade.
During the national lockdown concerns over the spread of the Coronavirus has led many retailers to stop accepting cash as a payment method with the demand for cash from banks and ATMs slumping by over 70 percent during March and April.
Although the use of cash has subsequently increased, the NAO believes it is too early to assess the longer-term impact on cash access and usage. The report confirmed: “The experiences of consumers during this period may offer new insights for the future into the potential impact of markedly reduced cash use.”
The reduction in the use of cash and the prognosis outlined by the NAO paints a bleak picture for the pub, bingo and AGC sectors which are prohibited from using electronic payment methods, something that must change if the industry is to be given the opportunity to survive and prosper.