Coinage pays the price of cuts

The Royal Mint will produce cheaper versions of 5p and 10p coins from January and put them into circulation in April, in a move that should save 10m a year.

The change, contained in the small print of the Comprehensive Spending Review, could cause problems for people using vending machines and parking meters, as the new coins will be slightly thicker – 1.9mm against 1.7mm.

The decision to change was taken because of the rising price of copper, which is used to produce cupro-nickel coins.

Strong demand for the metal from developing economies, such as China and India, has led to big increases in price.

As a result, from next April 5p and 10p coins will be made out of steel, which is cheaper; they will then be covered with nickel plating.