Low value coins will remain in circulation and the introduction of a compulsory system of rounding for all cash transactions will not be explored further at this stage.
The announcement is being made by the Treasury to coincide with the publication of a document detailing the outcome of a seven-week consultation - it asked for people’s views on whether 1p, 2p and 5p coins should be withdrawn and a system of rounding transactions to the nearest 10p introduced.
A total of 1,050 responses were submitted between May 10 and June 28 this year by residents, retailers, the wider business community and local authorities.
The feedback received has now been considered and a decision taken to allow 1p, 2p and 5p coins to remain in circulation. The Treasury will, however, continue its policy of not minting any further 1p or 2p coins due to the cost of both production and storage.
Treasury Minister Dr Alex Allinson MHK said:
‘The response to the consultation was excellent and I’d like to thank everyone who took the time to share their views and join the discussion on this important topic.
‘While the outcome means there will be little effect in the short-term, it’s important to note the consistent trend in the declining use of cash. This has been recorded in the UK and also locally by the Department for Enterprise, whose recent survey showed transactions split 70% digital and 30% cash.’
Recognising that the number of 1p and 2p coins in general circulation will gradually decline over time due to no more being minted, the Treasury Minister is keen for businesses to consider how a voluntary rounding policy for cash transactions may apply to their particular business.
Minister Allinson said:
‘As the cost of minting 1p and 2p coins is greater than their value, there are no plans to produce any more. Businesses should therefore start thinking about how this may affect them and plan for when the number in circulation falls to a point that requires them to start rounding to the nearest 5p on a voluntary basis.’
He added:
‘Issues facing charities were raised as a key concern through the consultation as so many rely on donations of loose change, which people tend not to carry these days. I’d like to appeal to people to dig out any jars of small change they may have and give them to a good cause. I’d also encourage charities to look at the support available to modernise their collection strategy through investment in mobile card readers.’
While the response document notes that the UK Government has made no commitment to withdrawing low value coins, if it were to do so, then the Isle of Man Government would follow suit.
The response document can be found on the Isle of Man consultation hub.
