A History Of The British Pound

History of British Pound

2017 has been a year of change for the British currency with the retirement of the old paper £5 note in May, the introduction of the new 12 sided £1 coin in March and the arrival of the new polymer £10 note in September.

To celebrate this, we thought that we’d take a look back at the history of the currency of Britain as well as provide some interesting facts about it. While most people will spend their money without even thinking about the history that has brought our currency to where it is today, it is surprisingly long.

A Long History For Pound Sterling

The official name of British currency is the pound sterling, but it’s more common name is the pound. It has many different nicknames as well, including quid, bob as well as being likely to have more regional nicknames.

A strong distinction for pound sterling is that it is the oldest currency that is still in use. Since its inception in the late 8th century in the Anglo-Saxon kingdoms, it has been used continuously. Until the 13th century, silver pennies were the only coins to be found and even after this, silver remained the standard for the currency until the 18th century.

After this point, gold became the standard that the pound was based on. Paper money began to be issued at the end of the 17th century after the formation of the Bank of England in 1694 and the Bank of Scotland in 1695. An interesting fact about the Bank of England is that it is the second oldest central bank in the world, after the Swedish Sveriges Riksbank.

The Arrival Of Decimalisation

A large portion of people today will only be familiar with pounds and pence; given this is our primary currency. But before 1971, there were also shillings and occasionally people used guineas – a side note on guineas, this is still used when buying and selling racehorses.

On 15 February 1971, the pound sterling was decimalised by dropping the shilling and penny with a new, single subdivision, what we now call the new penny. Some people may occasionally find a one pence coin that says ‘New Penny’ instead of ‘One Penny’, which could be potentially valuable to collectors.

Pound sterling is not only the official currency of the United Kingdom, but also of Jersey, Guernsey and other British territories including the British Antarctic Territory! Each pound contains 100 pence, which is abbreviated to a single p when discussing pence.

Despite having a national currency, there are currently many different kinds of pound sterling available. Scotland, Northern Ireland, the Channel Islands, the Isle of Man, Gibraltar and England and Wales all produce their own versions of the pound sterling. Theoretically, this can be accepted in the UK anywhere, but merchants are under no obligation to accept.

Even if a merchant will not accept another version of the pound, your bank will still exchange them for locally issued bills at their face value, so don’t worry too much!

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Sarah Jubb
Sarah Jubb

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