Scrapping 1p and 2p coins will hit vulnerable people and those on low-incomes hardest, experts warn
LOW-INCOME families and vulnerable people will be worst hit if the Government pushes ahead with scrapping 1p and 2p coins.
The future of the coins hang in the balance after the Chancellor announced a review into the role of cash in yesterday's Spring Statement.
But money experts are arguing the decision will hurt households that are already struggling the most.
Ricky Willis, the founder of money blog , reckons scrapping the coins will affect the elderly and households with an income of less than £15,000 per year.
He told the Sun Online: "I have seen a trend that many people on lower incomes use cash to pay for their day-to-day essentials as it makes it easier to budget.
"Coppers do get put into savings jars and get spent during harder times or towards the end of the month when money is tighter.
He added that scrapping the pennies could also have an impact on the cost of items.
Mr Willis said: "Something for 99p will round up to £1 when you pay in cash. While it's only one penny they add up over time and, when you budget every penny, this will hurt households who already struggle."
Official figures show that there are 2.7 million people who are entirely reliant on cash.
According to Sarah Pennells, the founder of UK's leading money website over half of those who only use cash have a total household income of less than £15,000 a year.
She told the Sun Online: "For many of those who rely on cash, every penny does count.
"I can understand that there’s quite a cost to making 1p and 2p coins that many people don’t spend, but any plans to do away with them mustn’t penalise those on the lowest incomes."
More about the Spring Statement
"I can’t imagine the end result being that shops round their prices down!".
Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline, said that it is "crucial" that the impact on people who may not have access to a bank account or use card payments is considered in any proposals to potentially scrap the use of 1 and 2p coins.
She added: “Many people will not be affected by this, and while there is greater use of contactless payments now, for those people who are financially excluded, this potential change could make more of a difference than you might think."
Sarah Coles a personal finance analyst at Hargreaves Lansdown, said that coppers play a small but "vital role" in the nation's saving habits.
One in six of the coins are used once before leaving circulation and in many cases because people collect their small change at the end of the week, and add it to their savings jar.
PHIL YOUR BOOTS Spring Statement 2018 – how does it affect you? Everything you need to know
For Sarah Williams, the debt campaigner who runs , elderly shoppers will be the ones feeling the pinch.
She told the Sun Online: “Pensioners and people on low incomes often budget very carefully, looking after every penny. Getting rid of copper coins could push up the price of many essentials for them.”
Some MPs also claim doing away with the pennies would hit charity buckets.
Shadow Civil Society minister Steve Reed said the government must “think again”.
The Labour MP told the : “Cash is the most popular way for people to donate to charities, and much of that comes in small change like 1p and 2p coins.
Highlights from the Spring Statement 2018
TODAY Chancellor Philip Hammond updated the House of Commons on the health of the nation's economy. Here are the key points:
The economy is growing faster than expected - The Office for Budget Responsibility has upgraded its growth figures to 1.7 per cent in 2017 and 1.5 per cent this year – both higher than previously forecast in last November’s Budget.
Wages could rise above inflation - Inflation is forecast to fall this year, so by Autumn real incomes will be on the rise again.
Cut down on plastic waste - A consultation will be held to look into tackling Britain's huge plastic waste pile. This could mean more tax slapped on crisp packets or deposit returns schemes.
The end of the £50 note, 1p and 2p coins - A consultation has been launched to look into the future of cash and it could mean the end for some coins and notes.
Thousands more affordable homes - An extra £1.67billion for 27,000 affordable homes over the next five years and double the financial support for small house builders to £220million.
£80million boost for small businesses - Help for small businesses including bringing forward a rates revaluation.
Tax break for van drivers - Vehicle excise duty (VED) rates would be reviewed for commercial motors. Drivers who buy the “cleanest” new models are likely to be offered cheaper road tax rates in the future.
Here's how the Spring Statement affects you.
“If the government goes ahead, it will directly hit the vulnerable people who rely on charities to feed, clothe, house and care for them.”
Yesterday's consultation on cash and the future of digital payments put the future of our coppers into question.
It claims that 500 million 1p and 2p coins fall out of circulation every year, meaning that the Royal Mint has to replace them.
Of course, this isn't set in stone - it's all part of a review that anyone can give feedback on.
If you do, you can get in touch via the website and you have until June 5 2018.
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