British Money

The history of British money dates back over a thousand years and has undergone many transformations, from early silver pennies to today’s modern banknotes and digital payments.

Early Anglo-Saxon Coinage (c. 600–1066)

• Before coins, trade was conducted using barter and foreign currency, such as Roman and Frankish coins. • The first native English coins appeared around 675 AD - small silver sceattas used mainly in trade. • By the 8th century, the silver penny became the dominant coin and remained the primary unit for centuries. • Coins were often minted locally by moneyers, who worked under royal authority.

The Medieval Period (1066–1485)

• After the Norman Conquest (1066), the silver penny remained dominant. • Gold coins appeared in the 13th century, like the gold noble (worth 6s 8d). • Edward III introduced the first English gold florin and later the gold noble. • Coins were often clipped or counterfeited, leading to strict laws against tampering. • The pound sterling (£) was established as a unit of account.

Tudor & Stuart Era (1485–1714)

• Henry VII introduced the first shilling and sovereign coin. • Henry VIII debased the coinage (reducing silver content), leading to inflation. • Elizabeth I reformed the coinage, restoring its silver content. • The first official British banknotes appeared under the reign of Charles II in the late 1600s. (issued by goldsmith bankers).

The Shift to Milled Coinage (1662)

• Before the 17th century, coins were hammered by hand, making them irregular. • Under Charles II, machine-milled coins were introduced, improving security.

The Establishment of the Bank of England (1694)

• Founded to fund war efforts against France, the Bank of England began issuing banknotes that were initially handwritten. • By the early 18th century, banknotes became more common, though they were mostly used for large transactions.

The 18th & 19th Century Reforms

• In 1717, Sir Isaac Newton (as Master of the Royal Mint) fixed the gold standard, linking the pound to a set value of gold. • In 1821, Britain formally adopted the gold standard, making the pound directly convertible to gold. • The first modern machine-minted coins appeared in the 19th century.

20th Century: The End of the Gold Standard & Decimalisation

• The gold standard was abandoned in 1931 due to economic pressures. • Banknotes replaced gold coins for everyday transactions. • In 1971, Britain decimalised its currency, switching from the old system (pounds, shillings, pence) to the modern 100 pence = £1 system. Old English money, used before decimalization in 1971, was based on a system of pounds (£), shillings (s.), and pence (d.). This system, known as £sd, had its roots in medieval times and was derived from Roman and Carolingian influences.

Basic Units of Currency

Pound (£, Libra) – The highest standard unit of currency. Shilling (s.) – 1/20 of a pound (12 pence). Penny (d., Denarius) – 1/12 of a shilling or 1/240 of a pound.

Subdivisions and Other Coins

Decimalization and the End of the Old System

On February 15, 1971, Britain switched to a decimal system, where 100 new pence made up a pound, replacing the old complex structure. The pre-decimal coins were gradually phased out, though some (such as the sixpence) remained in circulation for a while.

Modern British Money

• The Bank of England issues polymer banknotes featuring famous figures (e.g., Queen Elizabeth II, Winston Churchill). • Coins have evolved in design, featuring different monarchs and commemorative editions. • Contactless payments and digital banking have become dominant in the 21st century. The Royal Mint has issued many other special coins such as the Crowns above for the 1977 Jubilee, Queen Mother 80th birthday in 1980 and Charles and Diana’s Wedding in 1981 There was also the Churchill Crown of 1965, Queen Elizabeth’s Silver Wedding in 1972, the first 50 pence piece 1973, first two pound coin in 1986, and a £5 coin for Queen Elizabeth’s 40 year reign in 1993 Many historical figures have appeared on the bank notes over the years.