The Isle of Man’s big move to phase out little coins
The Isle of Man have shared some big news about their copper coinage, and it’s causing quite a stir in the collecting community. They have confirmed that the phasing out of 1p and 2p coins will begin this year, meaning the days might be numbered for copper coins.
Why the change?
Following a consultation in 2023 by the Manx government about whether it should keep copper coins, residents responded with “no thanks”. With a population of only 84,000, many young people on the island said they don’t carry cash at all, and most rely entirely on cards or contactless payments. The pandemic also forced islanders to adapt to card payments.
Credit: Kamran.nef, CC BY-SA 4.0, via Wikimedia Commons
Rising costs of minting new coins, especially coppers, means that making a new 1p coin now costs more than a 1p coin is worth. It’s not just the coppers either, as its estimated that a new 5p coin costs around 20p to make.
Taking these factors into consideration, the Isle of Man has encouraged businesses to introduce ‘cash rounding’ as the first phase.
What is cash rounding?
Cash rounding is the practice of rounding prices to the nearest five or zero, eliminating the need for 1p and 2p coins.
Cash rounding has been used in Sweden since the 1970s and was also adopted by Canada, New Zealand and the Republic of Ireland.
Credit: Zannaoriordan, CC BY-SA 4.0, via Wikimedia Commons
Credit: Jennifer McNairMuseums Victoria, via Wikimedia Commons
Copper coins will remain legal tender on the island, and won’t be withdrawn from circulation, but no more will be minted.
Let’s hear from the Isle of Man
After the cash rounding initiative was announced, there were concerns from the public about inflation. However, businesses were quick to claim that, based on research from other countries, this would not be a problem.
The Isle of Man’s treasury minister, Dr Alex Allinson MHK, said: “Most businesses here didn’t think it would cause significant inflation. But certainly the public perception is that it would do.”
He also stated that: “If the UK were to get rid of coppers, we would probably follow suit”.
No new coppers have been minted by the Isle of Man since 2016 due to decreased demand, and even the most recent decimal coin set, the 2023 Manx Wildlife Set, didn’t feature 1p or 2p denominations – so the phasing out process has been inevitable for a while.
What about the UK?
The number of cash payments in the UK has reduced significantly in the last 10 years, and especially so since the pandemic.
According to The Royal Mint, no new 2p coins were minted in 2022 and no new pennies were minted in either 2018 or 2019. This is an indication of decreasing demand for small change, even in the UK, so it’s not surprising that the Isle of Man, with a much smaller population, would be one of the first places to implement the phasing out of coppers.
Find out more about the future of 1p and 2p coins in the UK >>
A Treasury spokesperson confirmed that there are currently no plans to change the denominational mix of coins in the UK. So if the Isle of Man is waiting to follow our lead on getting rid of coppers, it’s unlikely that any definitive changes will happen anytime soon.
What do you think about copper coins? Do you still use the 1ps and 2ps in your change? Let us know in the comments!
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The banks charge a fortune for handling business cash deposits, works out more than the card fee for non cash payments. Retailers could still price to the penny, and only round down if cash is tendered.
We have been through this before, the farthing, ha’penny, then decimalisation, and then the half new penny all were phased out, it’s only a matter of time for the Penny and 2 pence.
I don’t agree with the £5 crown suggestion. The polymer notes now last well, and a crown is a huge coin to carry around.
I still use the copper coins but sometimes the shops don’t have the exact change so round down and you end up saving the odd bit
I still use pennies and 2ps whenever possible and don’t mind receiving them in change. I think that phasing them out would be a very bad idea. Also, our penny still has a relatively high value when compared to the lowest denominations in other currencies (e.g. the 1 euro cent, which at the time of writing this comment 1 euro cent is not even worth one penny (.01 EUR = .0085 GBP.) So in short, we should save our 1 & 2p coins! (But also spend them, to keep them in circulation!)
Added to this, if they ever do get withdrawn, I think it is surely very likely that the 5p will be withdrawn with them and everything will be rounded to the nearest 10p, like in New Zealand.
I’ve just been on a once in a lifetime holiday to visit my daughter in New Zealand and was shocked to see the lowest denomination coin was a 10 cent ! Watch out for this swizz, I was accustomed to 240 old pennies to £1 and look what that did to the value of the pound sterling!
I imagine that most small coins are put in charity boxes, so it is the charities that will suffer so it’s a difficult decision to make
I’ve noticed now that some places, instead of charity boxes, if you use card there is an optional round up which goes to charity
Can they use UK coinage there? So could the use a UK 1 or 2p UK coin instead?
Hi Peter, you can indeed use UK coins in the Isle of Man, so this could potentially lead to more UK coinage getting mixed into circulation on the island. Or they may choose to stop accepting copper UK coins as well, it’s definitely one to watch!
I don’t feel the uk should discontinue the copper coins it would be disastrous for sea side Amusements.
If they are phasing out the little coins, how long before the 5p disappears too? Still at least when they have removed three of the coins the annual sets will be cheaper, with only five definitives to produce. Oops I forgot. These days the Royal Mint exists mainly to make profits from coin production. Most of their coin designs don’t actually become real money, being produced purely as decorative commemoratives, available only at a vastly inflated price rather than being collectable in your change. It is a sad state and will deter young collectors from participation in coin collecting.
I would be concerned that many businesses would round up rather than down which would increase shopping bills on food and household essentials significantly.
My other concern would be the loss of revenue for charities as many people toss their small change, especially coppers, into collecting tins on shop counters.
Yes still use the 2p 1p coins even all the other coins love using cash sad that isle of Man are stopping them . Hate credit cards prefer cash all the way use cash to pay bills shopping etc hated it in the pandemic now back to using my cash love it need more support to use cash younger generation ruin our old ways very sad !
I still use copper coins and support their retention.
However I see no need for 2p or £2 coins as a couple of 1p or £1 coins can be used.
I would also support the £5 note being replaced with a £5 coin which would last for many years.
I assume that the cash rounding is only done on the total amount and not individual items so that any single item can still be priced down to individual pence, eg 17p, 24p. 99p etc. This would work out and be fair since on average you would not lose out.
One area where it may affect things is charities, many of which have collecting tins in various public places.