Paper bank notes transition to end in September

Today (30 March) the Bank of England issued its six-month reminder to consumers and businesses about the withdrawal of legal tender status (or WOLTS) of the paper £20 and the paper £50 banknotes on 30 September 2022*.

The Bank has been gradually replacing its paper notes with polymer ones over a number of years, and this WOLTS date marks the end point of that transition. The new polymer £20 notes feature the Romantic artist J.M.W. Turner, and the polymer £50 notes feature the mathematician Alan Turing.

Anyone who's got some of the old paper notes at home (and there may be a few of you, considering the estimated £7 billion worth of paper £20 and £10.5 billion worth of paper £50 notes still in circulation) is encouraged to go out and spend them, or deposit them at a bank or at a Post Office. Once the 30 September 2022 deadline has passed, people will no longer be able to spend paper notes in shops or use them to pay businesses.

While you?re at it, it might be worth thinking about emptying drawers and jars too. Estimates suggest there may be in excess of £50 million in loose change lying around in people's homes. Our research with IPSOS MORI last year suggested that around 35 per cent of people store coin at home and don't spend or bank it for over six months.

At a cash industry level, some of that coin hoarding contributes to increased coin ?velocity? (an estimate of the time taken for a coin to complete the circuit of cash centre - customer - cash centre). Our data shows velocity increased considerably over the pandemic and coins may stay out ?in the wild? for several years. For example, before the pandemic in 2019 a £1 coin would typically take around a year to circulate, while now it is likely to take twice as long. It seems that consumers are holding on to their loose change a lot longer - maybe stashing it in jars, decorating their walls and floors or simply throwing it away.

So, if consumers are going to dig out their old notes ahead of the WOLTS date, then it may be a good time to empty their jam jars and dig down the back of the sofa for those loose coins too.

* Notes that have been withdrawn from circulation will always be exchanged by the Bank of England or can be paid into accounts at UK banks and the Post Office.

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Paper bank notes transition to end in September

30.03.22

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