Before this date the British pound sterling (symbol "£") was subdivided into 20 shillings, each of 12 pence (old pennies), a total of 240 pence. With decimalisation, the pound kept its old value and name, but the shilling was abolished, and the pound was subdivided into 100 of what was originally called "new pence" ("NP"), and later pence/pennies ("p") when confusion was no longer likely, each of which was worth 2.4 old pence (abbreviated "d"). A coin of half a new penny was introduced to maintain the granularity of the old penny, but dropped as inflation reduced its value. An old value of 7 pounds, 10 shillings, and sixpence, typically abbreviated £7/10/6 or £7 10s. 6d. became, only, £7.521/2p. Amounts with a number of old pence which was not 0 or 6 did not convert into a round number of new pence. The Irish pound had the same £sd currency structure, and the same decimalisation was carried out.
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The Russian ruble was the first decimal currency to be used in Europe, dating to 1704, though China had been using a decimal system for at least 2000 years. Elsewhere, the Coinage Act of 1792 introduced decimal currency to the United States, the first English-speaking country to adopt a decimalised currency. In France, the decimal French franc was introduced in 1795.
Before the 1970s, earlier efforts in the United Kingdom to introduce decimalised currency had failed; in 1824, the United Kingdom Parliament rejected Sir John Wrottesley's proposals to decimalise sterling, which were prompted by the introduction of the French franc three decades earlier. Following this, little progress towards decimalisation was made in the United Kingdom for over a century, with the exception of the two shilling silver florin, first issued on 1849, worth 1/10 of a pound. A double florin or four shilling piece, introduced in 1887, was a further step towards decimalisation, but failed to gain acceptance and was struck only between 1887 and 1890.
Though little further progress was made, The Decimal Association, founded in 1841 to promote decimalisation and metrication, saw interest in both causes boosted by a growing national realisation of the importance of ease in international trade, following the 1851 Great Exhibition; it was as a result of the growing interest in decimalisation that the florin was issued. In a preliminary report issued in 1857 by the Royal Commission on Decimal Coinage, the benefits and drawbacks of decimalisation were considered, but the report failed to draw any conclusions on the adoption of a change in currency. A final report in 1859 from the two remaining commissioners, Lord Overstone and Governor of the Bank of England John Hubbard, came out against the idea, claiming that it had "few merits".
The Royal Commission on Decimal Coinage (1918–1920), chaired by Lord Emmott, reported in 1920 that the only feasible scheme was to divide the pound into 1,000 mills (the pound and mill system, first proposed in 1824), but that it would be too inconvenient to introduce. A minority of four members said that the disruption would be worthwhile. A further three members recommended that the pound should be replaced by the royal, consisting of 100 halfpennies, with there then being 4.8 royals to the former pound.
In 1960, a report prepared jointly by the British Association for the Advancement of Science and the Association of British Chambers of Commerce, followed by the success of decimalisation in South Africa, prompted the Government to set up the Committee of the Inquiry on Decimal Currency (Halsbury Committee) in 1961, which reported in 1963. The adoption of the changes suggested in the report was announced on 1 March 1966. The Decimal Currency Board (DCB) was created to manage the transition, but the plans were not approved by Parliament until the Decimal Currency Act of May 1969. The former Greater London Council leader Bill Fiske was named as the Chairman of the Decimal Currency Board.
Consideration was given to introducing a new major unit of currency worth ten shillings in the old currency. Suggested names included the new pound, the royal and the noble. It would have resulted in the "decimal penny" being worth only slightly more than the old penny, an approach adopted in South Africa, Australia and New Zealand in the 1960s, adopting respectively the South African rand, Australian dollar and New Zealand dollar equal in value to 10 shillings. However, Halsbury decided that the pound sterling's importance as a reserve currency meant that the pound should remain unchanged.
Under the new system, the pound was retained, but was divided into 100 new pence, denoted by the symbol p. New coinage was issued alongside the old coins. The 5p and 10p coins were introduced in April 1968 and were the same size, composition and value as the shilling and two shilling coins in circulation with them. In October 1969, the 50p coin was introduced, with the 10s note withdrawn on 20 November 1970. This reduced the number of new coins required to be introduced on Decimal Day, meaning that the British public would already be familiar with three of the six new coins. Small booklets were made available, containing some or all of the new denominations.
The old halfpenny was withdrawn from circulation on 31 July 1969, and the half-crown (2s 6d) followed on 31 December to ease the transition. The farthing, last minted in 1956, had already ceased to be legal tender in 1961.
A substantial publicity campaign took place in the weeks before Decimal Day, including a song by Max Bygraves called "Decimalisation". The BBC broadcast a series of five minute programmes, titled "Decimal Five", to which The Scaffold contributed some specially written tunes. ITV repeatedly broadcast a short drama called Granny Gets The Point starring Doris Hare, in which an elderly woman who does not understand the new system is taught to use it by her grandson. At 10 am on 15 February and again the following week, BBC 1 broadcast 'New Money Day', a Merry-Go Round schools' programme in which puppet maker Peter Firmin and his small friend Muskit encountered different prices and new coins when they visited the shops.
Banks received stocks of the new coins in advance, which were issued to retailers shortly before Decimal Day to enable them to give change immediately after the changeover. Banks were closed from 3:30 pm on Wednesday 10 February 1971 to 10:00 am on Monday 15 February to enable all outstanding cheques and credits in the clearing system to be processed and customers' account balances to be converted from £sd to decimal. In many banks, the conversion was done manually, as few bank branches were then computerised. February had been chosen for Decimal Day because it was the quietest time of the year for the banks, shops and transport organisations.
Many items were priced in both currencies for some time before and after the change. Prior to Decimal Day, items priced in both currencies had displayed the price in predecimalised currency first, with the price in decimal currency last in parentheses. From Decimal Day onwards, this order was reversed, with decimal currency presented first, and predecimal currency last in parentheses; for example, 1s (5p) would become 5p (1s). This latter order was used on most football programmes during the 1970–71 season. High denomination (10p, 20p and 50p) stamps were issued on 17 June 1970. Post offices were issued with simplified training stamps in the same colours as the upcoming decimal stamps.
Exceptions to the 15 February introduction of decimalisation were British Rail and London Transport, which had gone decimal one day early, the former urging customers, if they chose to use pennies or threepenny pieces, to pay them in multiples of 6d (2+1/2p, the lowest common multiple of the two systems).
Conversion tables were provided, showing how prices in £sd rounded to the new currency: this including saying 3d was equivalent to 1p though 9d was equivalent to 4p. This led to some anomalies: school meals were charged at 1s9d a day or 8s9d for a five-day week; these became 9p a day or 45p a week despite the conversion tables suggesting 8s9d should be 44p.
After Decimal DayEdit
Because of extensive preparations and the publicity campaigns organised by the British government, Decimal Day itself went smoothly. Some criticism – such as the fact that the new halfpenny coin was relatively small, and that some traders had taken advantage of the transition to raise their prices – were levelled, despite the fact that in the latter case, overall price adjustments slightly favoured the consumer. Some used new pennies as sixpences in vending machines. After 15 February, shops continued to accept payment in old coins but always issued change in new coins. The old coins were then returned to banks, and so most of them were quickly taken out of circulation.
The new halfpenny, penny, and twopence coins were introduced on 15 February 1971. Within two weeks of Decimal Day, the old penny (1d) and old threepenny (3d) coins had left circulation, and old sixpences had become somewhat rare. On 31 August 1971, the 1d and 3d were officially withdrawn from circulation, ending the transition period to decimal currency.
The government intended that in speech, the new units would be called "new pence"; however, the British public quickly began to refer to pennies as "pee" when shortened, with "10p" pronounced as "ten pee" instead of "ten new pence". Other shortenings previously common, such as "tuppence", were now rarely heard, and terms such as "tanner" (used for the silver sixpence), which previously designated amounts of money, were no longer used. However, some slang terms, such as "quid" and "bob", previously used for pounds and shillings respectively, survived from predecimal times. Amounts denominated in guineas (21s or £1.05) were reserved still for specialist transactions, and continued to be used in the sale of horses and at some auctions, amongst others.
The public information campaign over the preceding two years helped, as well as the trick of getting a rough conversion of new pence into old shillings and pence by simply doubling the number of new pence and placing a solidus, or slash, between the digits: 17p multiplied by 2 = 34, – approximately equal to 3/4 ("three and four", or three shillings and four pence), with a similar process for the reverse conversion. The willingness of Britain's younger population to embrace decimalisation also helped, with elderly people having greater difficulty in adapting; the phrase "How much is that in old money?", or even "How much is that in real money?" became associated with those who struggled with the change, before in the following decades coming to refer to conversions between metric and imperial weights and measures. In shops from Decimal Day onwards, new stock would be universally priced in 'new money', though in smaller shops such as newsagents, it was still possible to find stock priced in £sd for several years after 1971; however, remaining stock priced in £sd would still be charged in its equivalent in decimal currency.
Around Decimal Day, "Decimal Adders" and other converters were available to help people convert between the old and new coins. The following is a table showing conversions between the decimal and pre-decimal systems.
|(new) pence||1p = £0.01|
|Farthing||1/4d||1/48s ≈ 0.104p|
|Halfpenny||1/2d||1/24s ≈ 0.208p|
|Penny||1d||1/12s ≈ 0.417p|
|Pound||20/-||£1 = 100p|
|Guinea||21/-||£1.05 = 105p|
Validity of old coinsEdit
All predecimal coins, except for certain non-circulating coins such as crowns, sovereigns and double florins which were explicitly excluded from demonetisation, are now no longer legal tender. Public outcry at the proposed demise of the old sixpence (6d), worth exactly 2+1/2p and originally slated for early withdrawal, postponed its withdrawal until June 1980.
Shillings and florins, together with their same sized 5p and 10p coin equivalents, coexisted in circulation as valid currency until the early 1990s. In theory, this would have included coins dating back to 1816, but in practice, the oldest were dated 1947, as older coins contained silver, meaning the value of their metal was worth more than their nominal value. The coins were withdrawn when smaller 5p and 10p coins were introduced in 1990 and 1992 respectively.
The face value of Maundy money coins was maintained, increasing all their face values by a factor of 2.4, as the coins continued to be legal tender as new pence. The numismatic value of each coin, though, greatly exceeds face value.
Commemorative 'decimal' Crowns dated 1972, 1977, 1980 and 1981 remain legal tender, with a face value of 25p as do the £5 coins issued from 1990 onwards.
The decimal halfpenny (1/2p), which had been introduced in 1971, remained in circulation until 1984, when its value had been greatly reduced by inflation. It was not struck, save for collectors' sets, following 1983, with those dated 1984 struck only as proofs, or in uncirculated mint sets. The decimal halfpenny was demonetised on 31 December 1984. The 50p piece was reduced in size in 1997, following the reduction in size of the 5p in 1990 and the 10p in 1992 (the large versions of all the three have been demonetised). The 1p and 2p underwent a compositional change from bronze to plated steel in 1992. However, both coins remain valid back to 1971, the only circulating coins on Decimal Day that are still valid.
In 1982, the word "new" in "new penny" or "new pence" was removed from the inscriptions on coins, and was replaced by the number of pence in the denomination (for example, "ten pence" or "fifty pence"). This coincided with the introduction of a new 20p coin, which from the outset bore simply the legend "twenty pence".
Republic of IrelandEdit
When the old £sd system (consisting of pounds, shillings, and pence) was in operation, the United Kingdom and Ireland operated within the Sterling area, effectively a single monetary area. The Irish pound was created as a separate currency in 1927 with distinct coins and notes, but the terms of the Irish Currency Act obliged the Irish currency commissioners to redeem Irish pounds on a fixed 1:1 basis, and so day-to-day banking operations continued exactly as they had been before the creation of the Irish pound. The Irish pound was decimalised on 15 February 1971, the same date as the British pound.
In Ireland, all pre-decimal coins, except the 1s, 2s and 10s coins, were called in during the initial process between 1969 and 1972; the ten shilling coin, which, as recently issued and in any event equivalent to 50p, was permitted to remain outstanding (though due to silver content, the coin did not circulate). The 1s and 2s were recalled in 1993 and 1994 respectively. Pre-decimal Irish coins may still be redeemed at their face value equivalent in euros at the Central Bank in Dublin.
Pre-decimal Irish coins and stamps' values were denoted with Irish language abbreviations (scilling ("shilling", abbreviated "s") and pingin ("penny", abbreviated "p")) rather than abbreviations derived from the Latin solidi and denarii used in other Sterling countries. Irish people and business otherwise used "£sd" just as in other countries. Thus, prior to decimalisation, coins were marked '1p', '3p' etc. rather '1d' and '3d' as in Britain. Low-value Irish postage stamps likewise used 'p' rather than 'd'; so a two-penny stamp was marked '2p' in Ireland rather than '2d' as in the UK. After decimalisation, while British stamps switched from 'd' to 'p', Irish stamps (but not coins) printed the number with no accompanying letter; so a stamp worth 2 new pence was marked '2p' in the UK and simply '2' in Ireland.
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