Posted on October 23rd, 2010 | Categories - News
Copper coins will be phased out to reduce manufacture costs and increase coin longevity.
Cheaper coins will be manufactured using cost-effective metals that last longer next year.
The cost of coin production is to be cut by using steel and nickel plating instead of copper, this weeks’ Spending Review has revealed.
Chancellor George Osborne announced the cost-cutting move on Wednesday, which will reduce coin manufacture expenses by £10 million a year.
The price of copper, the traditional material used to make UK coins, has increased due to an increase in demand from the Asian countries of India and China, who make their state coinage out of a cupro-nickel compound.
The Royal Mint said that steel and nickel coins will last longer – potentially up to 30 years. The 5p and 10p coins will be the first to make the change and production will begin in January 2011. The coins will go into circulation in April.
Andrew Stafford, chief executive of the Royal Mint said: “It is public knowledge that HM Treasury announced its plans to change the composition of 5p and 10p UK coins from cupro-nickel to nickel-plated steel within the next 18 months. The savings to be achieved by the Royal Mint announced in the Spending Review report result from the reduction in metal costs associated with the change to 5p and 10p production over the next few years”.
However, the new coins will be 0.2mm thicker, which could create problems for parking meters and vending machines – the coins may be too thick to fit through conventionally sized slots leading to concerns that current machines may need to undergo costly upgrades in the future.
According to the BBC there are 3.8 billion 5p pieces and 1.7 billion 10p pieces in circulation in the UK but recent research has suggested that cash payments will account for less than half of all transactions made in the country within five years time.