One day, perhaps, society will go totally cashless. Whether or not this will be a benefit is an open question. Until then, however, cash will stay a fact of life and governments will control it (sometimes via central banks). This means that the value of money can change (a lot) over time. Here is a quick guide to what you need to know.
Coins and notes can be introduced and phased out
The last major overhaul of the UK’s currency took place between 1968 and 1971. During this period, the old system of “pounds, shillings and pence” was phased out and replaced with the decimal system in place today.
In 1971, the UK’s decimal coins were a halfpence, a one pence and a two pence (in bronze) plus a five pence, a ten pence and a fifty pence in silver. Since then, the halfpence has been phased out and a twenty pence, a one pound and a two pound have been introduced.
The one pound note has been phased out along with the hundred pound note (both except in Scotland). The five, ten, twenty and fifty pound notes are all still in circulation. The guinea still theoretically exists. It’s used mainly in horse racing. Both prize money and racehorses can be valued in guineas (although transactions will be made in pounds).
Coins and notes can be updated
Even though some coins and notes have, technically, existed since the 1960s/1970s, none of them is still in the original format. Some have gone through multiple versions and may have had special editions as well for example to commemorate significant events.
When this happens, old coins and notes are generally removed from circulation via businesses (especially retailers) and banks. Essentially, customers will spend old coins and notes. The businesses where they spend them will take them to the banks. The banks will credit their balance but will send the old coins and notes for destruction.
Banks will also look out for coins and notes (especially the latter) which are simply in unfit condition for use. As with coins and notes which are going out of circulation, these are sent for destruction.
Given that this isn’t hugely environmentally friendly, the Bank of England has been trying to increase the lifespan of notes. Unfortunately, this has produced some rather controversial results. Notes introduced since 2016 contain animal fat, palm oil and plastic. This has upset vegetarians, vegans, environmentalists and some religious groups.
What to do with old money?
Between the move to alternative payment methods and COVID19 restrictions, it’s probably a safe bet that people haven’t been spending much cash of late. What’s more, if you have been using COVID19-related downtime to clean and declutter, you may have uncovered a pile of old coins and notes. If you have, you may be wondering what to do with them.
First of all, you should have a good look through them. If any strike you as unusual in any way, research them online. You may have struck lucky and found a valuable coin or note. If you haven’t, do a double-check and see if your coin or note is still accepted in circulation. If it is, you can just spend it or take it to a bank.
If, however, you have coins or notes which have gone out of circulation, you have five remaining options. The first is to take them to a bank. They may accept them although they may not. The second is to take or send them to the Bank of England. The third is to give them to a charity. The fourth is to keep them and the fifth is to donate or sell them as crafting supplies.