'It would be a shame': Could 1p and 2p coins be on their way out?
By Hannah Ward-Glenton, Producer
The Isle of Man is in the process of slowly phasing out its 1p and 2p coins as the cost of production is outweighing their usefulness.
But a recent consultation suggested that islanders did not want to get rid of the coins for good.
Could the UK follow suit and ditch lower denomination coins, or is their historical value too high? ITV News explains.
Money talks
The Isle of Man stopped minting new 1p and 2p coins in 2016 because the cost of making the pennies was more than the coins' value, the island's Treasury said.
Authorities then launched a consultation last year to assess the value of coins, and feedback suggested that 1p, 2p and 5p coins should stay in circulation.
The Isle of Man Treasury said it was still concerned about the cost of retaining low-value coins, and so would continue its policy of not minting new Manx 1p and 2p coins.
The coins would continue to be legal tender though and, in the event that stocks of the coins run low, businesses and customers would be encouraged to round to the nearest 5p, if paying with cash.
But the Treasury did not rule out the possibility of getting rid of the coppers.
"In the event the UK withdraws low value coins from legal tender, Treasury will follow suit," it said.
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A piece of history
UK coins are not going anywhere anytime soon, according to The Royal Mint, which produces coins on behalf of the UK Treasury.
"The government safeguarded the future of the 1p and 2p coins in 2019, and they remain an integral part of UK currency," the money manufacturer told ITV News.
And there is huge historical significance to the humble penny - it is the oldest surviving coin still in circulation, with it having originated from the very first silver penny of the Anglo-Saxon King Offa in the eighth century.
Peter Hutchison, senior coin specialist at Hattons of London, said he would be "outraged" if the UK's 1p and 2p coins were to disappear.
"It would be a shame for that bit of heritage that sets the British penny apart from anywhere else. It would be a shame to let that go," Mr Hutchison told ITV News.
Most European countries surrendered their historic currencies when the Euro was introduced in 1999.
The penny drops
Britain's money went decimal in early 1971, shifting the pound sterling from denominations of pounds, shillings and pence to just pounds and pence.
And the economy has changed drastically in the last 50 years, dragging down the spending power of the modest 1p and 2p coins.
With the small denominations no longer being minted by the Isle of Man, measures have been put in place for the eventuality that they run out entirely.
"Treasury will encourage businesses and customers to round transactions, where they are proposed to be undertaken by the use of cash to the nearest 5p or zero," the Treasury said, in the response to its coin consultation.
Mr Hutchison said: "There is the risk that getting rid of 1p and 2p coins, and rounding prices to the nearest 5p, could be inflationary as prices are bumped up, but that effect is likely to be mitigated by how little people actually use cash nowadays."
Concerns about inflation were listed as a "key reason" for Isle of Man residents objecting to the removal of 1p and 2p coins.
The Manx Government also said that the cost of producing low value coins is greater than their face value, but Mr Hutchison highlighted that this is balanced out by the bulk of coins in circulation generating a profit.
The Isle of Man does not use the same currency as the UK, despite the coinage looking very similar.
Manx currency is pegged to sterling, but it not considered legal tender in the UK. Pound sterling can be used on the Isle of Man.
Cashless society
Some Isle of Man residents said that ditching 1p and 2p coins would be an "unwanted nudge" in the direction of a cashless society, but the island is already seeing a huge decline in the use of cash.
More than 70% of the island's transactions are now digital, according to its Department for Enterprise.
"With fewer and fewer people using cash, it is important that we continue to have these conversations with residents and local businesses to find a balanced way forward that works for everyone," Dr Alex Allinson, Treasury Minister for the Isle of Man, told ITV News.
A global phenomenon
The Isle of Man is far from the first to get rid of low-denomination coins.
New Zealand ditched its copper coins in 1990, followed by Australia two years later.
Canada, Finland, the Netherlands and Sweden are also among the nations that have opted to remove their smallest currency denominations from circulation.
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