Member Article

The History of the Pound Coin

The pound coin was introduced in 1983, at the height of Thatcher’s reign in government, in response to rising inflation rates and the subsequent devaluation of the pound. The pound’s reduced worth meant that a pound note was being ‘treated more like a coin’, and after being battered around and shoved into pockets, wasn’t durable enough for purpose. Whilst the pound note would barely stand up to nine months of constant use, a coin can last upwards of forty years and so the switch was made and pound notes became obsolete in 1988.

On the thirtieth anniversary of the introduction of the pound coin, MoneySupermarket have produced an interactive ‘Story of the Pound’ graphic, which can be viewed here on their site. The content details the economic changes that Britain has undergone in this 30 year period, and the effect this has had on our currency. A graph showing the huge jump in price of the cost of food makes shocking reading, and begs us to ask the question – will the five pound note go the same way as the humble pound?

Thirty years on and there have been massive increases in the price of basic, everyday items; we’ve seen a 325% increase in the average price of a loaf of bread, 425% for eggs and 400% for coffee, as well as similar increases on a host of other items. This not only has a detrimental effect on family budgeting, as the cost of an average supermarket shop has skyrocketed, but has also had a negative effect on business costs and profits as businesses struggle to stay afloat whilst providing value to the consumer (not to mention the cost of the daily coffee run!). When the pound coin was first introduced in 1983, you could get 1.4 pints for a pound, and 5.9 Mars Bars; if you compare that to today’s costs, you’d be pulling similar statistics for the five pound note – in fact, in many pubs you’d be lucky to get much change from a fiver if you order just one pint at the bar.

Collectible five pound coins are already produced by the Royal Mint, but are not currently released into circulation as currency, and although they are technically legal tender, banks are not obliged to accept them. They are 38.61mm in diameter, and weigh 28.28g; in comparison, a pound coin weighs just 9.5g and is 22.5mm in diameter. If Britain was to instigate the five pound coin, changes may need to be made to the design, as the current weight and size makes it untenable and impractical for everyday use, but as these statistics show, we are perhaps not that far away from the five pound coin becoming a reality. When the pound coin was first released into circulation, there was widespread criticism, but it has since become a part of everyday British life; will the same thing happen to the fiver?

This was posted in Bdaily's Members' News section by Stephen Wright .