Can you imagine living without the one and two pence piece? Sure you can, because they're a massive pain in the arse and we'd all be better if they just went away. Well, former Chancellor George Osborne had a plan to withdraw the two coins entirely, but it was nixed at the last minute by David Cameron who feared the symbolism of the Tories getting rid of the coins.
Canada, New Zealand and Australia have all withdrawn certain low-value coins in the past. Mostly these single cent currencies cost much more to produce than their value. That's not in itself a problem, but there is a burden of producing coins that don't really have much of a purpose.
The Conservatives even wanted to take things further, according to The Guardian which reports the policy unit wanted to move to be entirely cashless by 2020. This would entirely prevent some forms of crime, while apparently increasing productivity too. While cashless seems nice in theory, it's not without its perils but governments love it, as it makes tax evasion a little more difficult.
How would removing pennies from circulation affect prices? Well the data from countries that have done it seems to be that it doesn't. Nor does it decrease the amount donated to charities. In Canada people paying with bank cards pay the exact price listed, while cash payments are rounded to the nearest five cents. In Australia everything was rounded instead, so there's no difference in payment at all. But however it's handled, it makes very little practical difference.
The ever excellent CGP Grey has a video on this, which you can watch below.
[via: The Guardian]