Since 2020 this has fallen by more than half, to less than £2 billion a year. Over the same period, over £185 million in new coins have been drawn from The Royal Mint and issued into circulation. Piled one on top of each other, the storage boxes for this new coin would be almost as tall as Mount Everest. As industry stock levels have remained fairly flat, the question has to be “where has all the coin gone?”. Analysis of previous years paints an even more puzzling picture: prior to the pandemic over £200 million in new coin was introduced into circulation EVERY year, without materially increasing stocks in wholesale cash centres. 

Collectors' items

Interest in coins as collectibles continues, with The Royal Mint issuing numerous commemorative designs of both £2 and 50p coins. Since the introduction of the £2 there have been 35 designs issued. There are almost 30 different 50ps to collect, a hobby enjoyed by around one percent of cash users. However, in general terms the use of cash is declining, so there should be fewer sums of coin languishing in self-service tills and vending machines, and the demand for new coin should reduce. We know that some small denomination coins are simply thrown away or lost, but this can’t account for the ongoing flow of coin out of the system.

The year after the new £1 coin was introduced, only £1 million in new coins of other denominations was purchased. This indicates that around £200 million in loose change was released as people emptied their money boxes to find the old round pounds. Wholesale cash flows dropped dramatically from that point. This may have been a result of the costs of upgrading vending and other machines that accepted cash, or retailers generally reviewing their coin requirements.

Coins in the drawer

It seems fairly standard practice these days for people to carry one emergency banknote, often in the back of a phone case. If the note is ever used, the easiest thing is to throw the change into a jar or drawer and replace it with another note (almost 44 per cent of cash users admitted to doing this in a recent survey). In this way, hard wearing coins that could be reused many times end up dusty and forgotten, while the taxpayer funds the production of new coins to replace them. There is also the environmental impact of transporting new coins from The Royal Mint in South Wales to wholesale cash centres around the country.

In these days of economic uncertainty, scouring the house for coins that could be used to fill a spending gap feels like the right thing to do. Around 40 per cent of people have already started to spend coins that were previously saved in jars and others are likely to follow suit. Looking after the pennies may just be a way to help the pounds go further.