The Decimalisation Association campaigned for decimalisation from 1841 onwards but it wasn’t until more than a century later that it was finally introduced. Decimal Day officially took place on 15th February 1971. From this day onwards, the traditional pounds, shilling and pence were no longer used in either jurisdiction. Instead, shillings were abolished and the concept of ‘new pence’ was introduced.
What is decimalisation?
Decimalisation refers to a conversion process whereby old metrics are replaced with new ones that are related by powers of 10. In relation to money, it’s easy to see why decimalisation was favoured. Prior to decimalisation, a pound was worth 20 shillings and one shilling was worth 12 pence. As such, a pound was worth 240 pence under the old system.
When decimalisation was introduced, however, the pound retained the same value but the sub-units (shillings and ‘old’ pence) were changed. Shillings were removed from circulation altogether and ‘old’ pence were replaced by ‘new pence’. Under this new system, a pound was worth 100 new pence. As this value is divisible by 10, it clearly fits the technical definition of decimalisation.
Why was decimalisation introduced?
Other countries were using decimal currencies well before the UK and Ireland, which prompted national governments to consider the prospect. It was in 1704 that Russia became the first European nation to use a decimal currency, with France following suit in 1795. Although Sir John Wrottesley proposed decimalisation in the UK in 1824, it was rejected by Parliament.
By the mid-late 19th century, however, calls for UK decimalisation were increasing. Supporters believed that having a decimal currency would make international trade easier and would, therefore, increase the country’s wealth.
In response to growing support for decimalisation, the florin was introduced in 1849. Worth two shillings, or a tenth of a pound, it was believed that this would ensure simplified international trade and achieve many of the aims proponents of decimalisation were campaigning for. However, the florin and the subsequent double florin failed to gain mainstream exception and did not dissuade the decimalisation movement.
Despite on-going attempts to introduce decimalisation in the UK, it wasn’t until 1966 that the Government agreed to the move. The creation of the Decimal Currency Board ensured the transition would be managed effectively and the later Decimal Currency Act 1969 confirmed the legal switch from ‘old money’ to decimal currency.
Although there are various reasons why decimalisation was introduced in the UK, the primary need for a decimal currency was to facilitate international trade. With many other currencies using a decimal system well before the UK, there was a risk that the UK would miss out on trade opportunities and suffer financial loss as a result. By introducing a decimal currency, however, the UK and her businesses could trade more efficiently with international partners.
What coins were introduced due to decimalisation?
When people learn more about decimalisation, the first question they usually ask is, ‘what was the first decimal coin issued in the UK?’. The first coins to be released were the five pence piece and the ten pence piece, or the 5p and 10p. In reality, however, these were actually released before decimalisation officially took place. It was believed that issuing these coins prior to the introduction of decimalisation would enable members of the public to get used to the new coins. As Decimal Day occurred in 1971 and the five and ten pence pieces were introduced in 1968, it was actually three years before decimalisation that the first decimal currency coins were released in the UK.
Similarly, the fifty pence coin, or 50p, was introduced in the UK in 1969, with the 10-shilling note, or 10s, being withdrawn the following year in November 1970. Both the old halfpenny and the old half-crown were also removed from circulation during the course of 1969 to pave the way for decimalisation.
At the time of decimalisation, in February 1971, a new halfpenny coin, penny and two pence coins were released. However, banks worked in units of one penny, which meant that the new halfpenny had limited usage.
As you can see, decimalisation did not occur suddenly and there was no attempt to switch from one system to another in a short timeframe. Instead, the process was gradual, which allowed for people to familiarise with the new system and coins they would be using.
Post-decimalisation changes to UK coins
Although decimalisation was the biggest change to UK currency in centuries, subsequent changes have also occurred. In 1982, for example, the twenty pence piece, or 20p, was introduced into general circulation.
Interestingly, the introduction of the 20p coincided with the switch from using the term ‘new pence to ‘pence. Ten pence pieces minted prior to 1982 bore the inscription ’10 New Pence’, for example, whereas coins minted from 1982 onwards bore the words, ‘Ten Pence’.
Perhaps surprisingly, the £1 coin wasn’t actually introduced until 1983, with the £2 coin being issued in 1997. Prior to this, the Bank of England £1 note was used in general circulation.
In addition to this, the 50p, 10p and 5p coins were reduced in size post-decimalisation, with their predecessors no longer being considered legal tender. Although the composition of 1p and 2p coins was modified in 1992, 1p and 2p coins issued from 1971 remain in general circulation and are legal tender. In fact, it is only the 1p and 2 coins that were issued on Decimalisation Day in 1971 that can still be used today, as all other coins have undergone some form of change since then.
What does decimalisation mean for collectors?
When old coins are taken out of circulation and new ones are issued, it provides people with an opportunity to add to their collections. Furthermore, as old or outdated coins become rarer, their value typically increases, which means they are more sought after. By understanding the process and reasons behind Decimalisation Day, collectors and enthusiasts can get an insight into the historical and societal changes that were afoot around this time. With greater knowledge of the era, building a collection of UK coins becomes even more excited and fulfilling.
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