The Isle of Man's government is encouraging businesses to round prices to the nearest 5 pence as it gradually phases out 1 and 2 pence coins.

The island's Treasury ceased minting Manx pennies, equivalent to British pennies, in 2016, as the cost of producing them exceeded their face value.

However, in a recent survey, nearly half (48%) of the island's residents expressed disagreement with the idea of completely withdrawing 1, 2, and 5 pence coins from circulation.

Concerns that businesses would round up rather than down, impacting inflation, were cited as a key issue for residents opposed to their removal. There were also concerns about the effect on charitable donations.

Following the survey results, the Isle of Man's Treasury stated that while it has "concerns" about the "ongoing costs of storing low-value coins," it will not withdraw them from circulation. Instead, it will encourage businesses on the island to round their prices to the nearest 5 pence on a "voluntary basis" when the supply of these coins diminishes to a point that necessitates rounding.

Dr. Alex Allinson, Minister for Finance, said, "As the cost of minting 1 and 2 pence coins exceeds their face value, there are no plans to mint new coins, so businesses should start thinking about how this might affect them and plan for when the amount in circulation falls to a point that requires them to round up or down voluntarily."

Regarding charities, he advised people to "dig out any penny jars they may have and donate them to a good cause" and suggested that charitable organizations consider modernizing their fundraising strategies by investing in mobile card readers.

The Isle of Man uses its own currency, the Manx pound, which is not legal tender in the UK but is equivalent in value to the British pound.

The Isle of Man Treasury stated that it currently has no plans to withdraw low-value coins but will follow suit if the UK government adopts such a policy.

Rumors about the future of 1 and 2 pence coins in the UK have circulated for some time. In 2019, then-Chancellor Philip Hammond attempted to put an end to such speculation by promising to protect the future of cash.

The following year, figures revealed that in 2020, the Royal Mint had minted 88 million new 1 penny coins after two years without any production.

Other countries, such as Canada and New Zealand, have already taken steps to discontinue their pennies. Canada ceased minting new pennies in 2012 as it sought to gradually phase out the coin, while New Zealand removed pennies from its list of legal tender in 1990.