NI cards to be phased out?

According to a report by the BBC the ubiquitous red and blue NI card is to be dropped and replaced with a letter in an effort to reduce the massive hole in the public finances.

I'm no expert in these matters but I can't help thinking that the plastic card is more durable and less likely to get lost than a letter. If that's correct then isn't there a risk of more people needing to have their number re-issued because they've lost it which will create greater cost not reduce it? Feel free to disabuse me of this thought in the comments.