The humble penny has been saved by the chancellor who has pledged to safeguard the future of cash.

Despite long-standing speculation that 1p and 2p coins may be scrapped, Philip Hammond announced there will be no changes to the mix of coins and notes.

He also safeguarded the future of the little-used £50 note.

Concerns have been raised over access to cash as more and more people opt to use cards, phones and watches.

Free-to-use cash machines are disappearing at a fast rate with more than 1,000 ATMs converted to charge fees in March alone, according to the consumer group Which?

However, 2.2 million people are estimated to be almost entirely reliant on cash in their daily lives.

The elderly, vulnerable and those in rural communities are thought to be most at risk if access to cash declines.

Mr Hammond 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.

“I’m also setting up a group which brings together the Treasury, Bank of England and the regulators to safeguard the future of cash and ensure its availability for years to come.”

Natalie Ceeney, chairwoman of the Access to Cash review, which recently described the cash system as “on the verge of collapse”, said: “Cash use is falling rapidly, but digital payments don’t yet work for everyone.

“We need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in the digital economy.”

Other steps being taken by the government are:

:: Support the Bank of England’s work to ensure cash is properly distributed across the country

:: Develop a coin checking system to remove counterfeits

:: Support new digital methods of payment while safeguarding access to traditional cash

Federation of Small Businesses national chairman Mike Cherry said: “The chancellor has shown he is listening to the small business community today.”

He added: “Keeping 1p and 2p coins in circulation is the right call. The freedom to use pennies is still important to a lot of small firms.

“For many, being able to charge prices that end in 99p rather than a round pound figure can be enough to tip intrigue into a sale, particularly where lower-value items are concerned.”

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