Mixed response to government decision to keep 1p and 2p coins

The Institute of Fundraising and the Directory of Social Change welcome the move, but the Charity Finance Group says withdrawing coppers could present opportunities for charities

1p and 2p coins: safe for 'years to come' (Photograph: Rachel Husband/Getty Images)
1p and 2p coins: safe for 'years to come' (Photograph: Rachel Husband/Getty Images)

Voluntary sector bodies have given a mixed response to the government's decision to retain 1p and 2p coins.

Philip Hammond, the Chancellor of the Exchequer, confirmed there would be no changes to existing coins or notes "for years to come".

Hammond announced a consultation on the role of cash and digital payments in the UK economy in last year's Spring Statement, including the discontinuation of 1p and 2p coins.

This prompted fears of a decline in donations, but Hammond said today he was setting up a group to "safeguard the future of cash and ensure its availability for years to come".

He said: "Technology has transformed banking for millions of people, making it easier and quicker to carry out financial transactions and pay for services.

"But it’s also clear that many people still rely on cash and I want the public to have choice over how they spend their money."

Lizzie Ellis, policy and information officer at the Institute of Fundraising, said it was pleased the Treasury had recognised the concerns of charities.

Ellis said: "We know that the importance of these coins is not just in the value that they amount to – pockets full of change means charities can have buckets and collection tins at train stations and supermarkets, giving them a public presence in people’s everyday lives and reminding them to give regularly.

"Often a child’s first charitable donation will be some pennies given to them by their parent to drop in a collection box, and the interaction they have with the person holding the box is typically a positive one, making it an important first step for them in charitable giving."

Jay Kennedy, director of policy and research at the Directory of Social Change, agreed.

"Lots of fundraising involves small amounts of money from many different donors, which collectively adds up," he said. "So it’s good these coins aren’t being phased out yet because such donations are crucial.

"However, we’re rapidly moving to a cashless society, so charities are going to have to adapt like everybody else and adopt new, technological ways to catch these often spontaneous donations."

But David Ainsworth, sector specialist at the Charity Finance Group, said there was £300m in circulation in 1p and 2p coins and the loss of copper coins would present two opportunities.

"The first is that we could run a windfall campaign to get people to give their coppers to charity, which could see a fairly hefty chunk of that £300m ending up in the hands of the sector," he said.

"The second is that it would give us an opportunity to talk about the transition away from cash, and maybe make a case to improve visibility and tax relief around things like contactless giving and mobile giving.

"So this isn’t an area where we feel there would be a big impact on charities, and we don’t have a strong view either way about whether these coins should be scrapped, but we’d probably marginally prefer they were."

The impact on the charity sector was highlighted in a number of consultation responses, according to the consultation document Cash and Digital Payments in the New Economy: Summary of Responses, which was published yesterday.

The document highlights concerns about the impact on bucket donations and says small charities are more likely to depend on cash.

It adds that some charities lack the equipment and skills to accept digital payments and dormant coins "represent significant stored value" for charities.

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