The Royal Mint will not produce any new £2 or two pence coins for at least a decade, as a new report called on the Government to protect access to cash.
Cash usage in daily transactions is falling but demand for notes has continued to increase, the report said. Public bodies need to make the system more efficient, the National Audit Office, which monitors spending, wrote in its report.
It said the Government should set out clearly what it wanted from the cash system and how it planned to protect vulnerable people who rely on physical money. Usage had already been dropping off and the coronavirus pandemic is likely to accelerate this trend, it warned.
However, two million Britons still rely on physical money for day-to-day spending and eight million would struggle without access to it, according to the Access to Cash Review, a campaign group. Problems are particularly acute for those in rural areas.
Access to cash is being increasingly limited. Fewer coins are being produced and the Mint has reduced the number of employees working on making coins by a fifth.
While The Royal Mint has halted production for some of the country's favourite coins, it did not rule out adding more to circulation if demand returned.
A spokesman for the Mint said: “We constantly monitor the demand for coins from the banks and Post Offices and seek permission to manufacture more from HM Treasury.
"Currency remains core to our business, but we understand that payment methods are changing and as a result we’ve successfully grown into new areas to safeguard our long-term future."
The number of free-to-use cash machines has also been declining as fewer cash users meant the system became costly and inefficient.
Between December 2017 and 2019 the number of free cash points fell by almost a fifth and the Covid-19 crisis has led to further cuts to the system.
One in eight banks and cash points has shut down during coronavirus due to staff shortages, social distancing and falling demand for cash, the Financial Conduct Authority, the City regulator, said in July.
Peter McNamara of NoteMachine, a cash point operator, said: "The Royal Mint not making any more 2p or £2 coins will have a more significant impact that many people realise. Cash isn’t purely relied on by the vulnerable and elderly. In fact, 43 million consumers – the majority of the adult population pre-lockdown – were withdrawing cash each month."
He added that coins were a vital means of budgeting for thousands of people as they provided a tangible way to keep track of spending.