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British Currency: What’s Changed in the Past 50 Years?

British currency has undergone some remarkable changes over the past five decades, from the launch of decimal money to the rise in digital payments.

In fact, currency has advanced faster over the past half-century than it did in the 2,000 years since the first coins were minted.

Halfpennies

© Georgios Kollidas / Shutterstock.com

As the number of digital, contactless and mobile payments increases, we’re taking a look back at the history of British currency.

The advances in technology in the 21st century have seen the use of cash declining, with more than a quarter of all payments in the UK being contactless today.

Changes in British currencies

Pre decimal British currency was pounds, shillings and pence, which had been in use since the 15th century, during the reign of King Henry VII. The old British currency was based on one pound being divided into 20 shillings. One shilling comprised 12 pennies.

One penny was further divided into two halfpennies, pronounced the “ha’penny”. Each penny could also be divided up into four farthings. This meant there were 240 pennies in each pound. Farthings were finally withdrawn from circulation on 1st January 1961 and the old halfpennies were withdrawn on 31st July 1969.

The “£” sign was based on the letter “L” which stood for Libra, a Latin word that meant a “pound of money”.

The symbol for a shilling was the letter “s” and the symbol for a penny was the letter “d”, based on the Latin word “denarius”, which was an ancient Roman coin.

The British currency system had remained the same for around 500 years until it was swept aside when decimalisation was launched in 1971.

Why did the currency change?

The government decided to go decimal as part of the modernisation of the UK. The decimal system was much simpler than the old currency and was aimed at making money calculations easier, quicker and less prone to errors.

Teaching children the complex system of pounds, shillings and pence in schools often took a great deal of time, so the government believed it would be much easier to teach them about decimal money instead.

While younger people seemed unperturbed by the crossover, there was some opposition from businesses and households to the enormity of the changes.

Generations of older people had used the old currency for decades. The government realised it would be difficult for them and permitted a five-year period of preparation before the changeover took place on 15th February 1971.

Decimal Day

The Decimal Currency Act 1967 laid down details of the change and the Decimal Currency Board supervised it. The changeover was known as Decimal Day, or D Day for short.

Numerous new British coin designs went into circulation, including smaller pennies known as “new pence”. There would be 100 pence to one pound, rather than 240.

The new decimal halfpenny and the one and two-pence coins were bronze. The new five and ten-pence coins were cupro-nickel.

Some old coins remained in circulation but were revalued. For example, the old sixpence coin was revalued at two-and-a-half pence before it was withdrawn in 1980.

The decimal halfpenny was withdrawn in 1984, as there was no further use for it. The old one and two-shilling coins became five pence and ten pence pieces. They were finally withdrawn in 1990 and 1992 respectively after new, smaller coins were launched.

The decimal 50-pence piece was the first seven-sided coin in the world. It had a 30mm diameter and weighed 13.5 grams. In 1997, it was redesigned and became much smaller, having a diameter of 27.3mm and weighing 8 grams.

One coin disappeared altogether on D Day: the old three-pence piece, commonly known as a “threepenny bit” and fashioned from nickel-brass with 12 sides. It was taken out of circulation in 1971, after being named as the most easily recognisable coin for bus conductors during the World War II blackouts.

What is a polymer banknote?

Banknotes have changed, as well as coins, over the past 50 years. Notes used to be made of paper and were hand-written, but they were printed from 1855.

The smallest denomination for many years was the ten-shilling note, which was withdrawn in 1970 and replaced by the 50p coin. The £1 note was withdrawn in March 1988 following the launch of the £1 coin in April 1983.

Today, there are four values of banknotes: the £5, £10, £20 and £50 notes. Paper notes have now been phased out because they were too flimsy and damaged easily.

The first polymer banknote in the UK was launched in 2016, when a £5 note printed on the revolutionary thin, flexible plastic went into circulation. The following year, a polymer £10 note was launched. Now, all notes are polymer.

There are more than £70 billion worth of banknotes circulating in the UK, so the Bank of England has made them difficult to counterfeit, high quality and long-lasting.

There has been an increase in security measures and anti-counterfeiting technologies. Holograms, with raised prints and watermarks are just some of the methods that help protect the integrity of the currency.

Portraits on banknotes

Since 1970, Bank of England notes have honoured many iconic Brits including nurse Florence Nightingale, composer Edward Elgar and scientist Isaac Newton. The final decision on who should feature is made by the Bank’s governor.

Traditionally, the notes also carry portraits of the monarch, with Queen Elizabeth II featuring since 1963. The late monarch has been the face of British banknotes for 61 years, and coins featuring Her Majesty have been around for 71 years.

Around 4.7 billion banknotes featuring the Queen’s face, with a total value of £82 billion, are still in circulation. These will eventually be phased out and replaced by a portrait of King Charles III. The first of these are due to appear on 5th June 2024.

Banknotes featuring the Queen will remain legal tender for the foreseeable future. The Bank of England says new banknotes will be printed only to replace those that are worn to minimise the financial and environmental impact.

Rise in digital payments

In the 21st century, contactless payments, online banking and mobile wallets have become increasingly common in everyday use.

The Covid pandemic has been cited as one reason why digital payments have become more popular, as they increased by 12% during 2020 alone. Prior to this, only 7% of payments were digital or contactless. During the past four years, they have increased to 27% of all payments in the UK.

There has been plenty of speculation that we will become a cashless society in the future, but financial experts say it’s “unlikely” that cash will be phased out any time soon.

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