New £1 coin: but should I hoard my existing £1 coins?

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Soon we will be saying goodbye to something most of us have handled and looked at every day for decades – in many cases all of our lives. Familiar in its dull goldish colour, its surprising weight and its thickness, the £1 coin has been in circulation since April 21, 1983.

Its replacement coin – a new, “unforgeable”, 12-sided coin, below – will be appearing in banks and shops from March 28.

Shops will stop taking the old coins on October 15 (scroll down for the full details of the replacement).

History of the current £1 coin

The roll-out in 1983 of the new coin – as now, regarding its replacement – involved several years’ meticulous planning. The decision to kill off the £1 note was announced by the chancellor of the exchequer in 1981.

By then the Royal Mint had been pondering for at least a year about how best to phase out £1 notes and replace them with a new coin. But there were numerous obstacles. One, said the Mint, was that “the present range does not have a suitable ‘slot’ for £1 coin”.

That’s because the existing range already included the large 50p, and for the new coin to be larger still would mean that it “would be too heavy”.

The new flagship coin would therefore have to be smaller. But how could that work?

The Royal Mint’s early proposals said “heavy coins ‘burn’ holes in the ordinary users’ pocket, inconvenience those, such as milkmen, who carry around large quantities and add extra transport and security costs for bulk handlers like banks and supermarkets”.

But on the other hand, it opined, “coins should command respect”. Furthermore, they should “be easily distinguishable, both visually and by touch. This is important in the dark and for blind or handicapped people.”

In the end the Mint opted for a coin of similar size to the 20p piece, but far thicker and heavier, and with the familiar yellow colour of the nickel brass mix. This is an alloy of copper (70pc), nickel (5.5pc and zinc (24.5pc).

“Two new coins of the same diameter might well be considered confusing but it is, in fact, entirely practical as long as other features are different.” The Royal Mint said.

“In particular the £1 coin will be perceptibly thicker. This will make it easier to identify in the dark, while meeting the requirement that a prime unit of currency is elegant and prestigious.”

How inflation made the £1 note ‘tatty and dirty’

One reason to scrap the note was the decline in spending power of £1. Notes – at least in the Seventies and early Eighties – tended to have a lifespan of less than a year. The Bank of England said £1 notes were requiring replacing after nine months.

Coins, on the other hand, can remain in circulation for as long as four decades.

But the “tatty factor” – notes that became too grubby, torn or threadbare for use – was being exacerbated by their dwindling value.

The Royal Mint commented in April 1983: “Because the note tends to circulate between the public and retailers, returning infrequently to banks where the condition can be monitored, it has resulted in the notes becoming tatty and dirty.

“This is a reflection of the loss of purchasing power of the note over a number of years resulting in the public treating the note in the same way as a coin by keeping it loose in pockets rather than wallets.”

Inflation might have been at its worst in living memory in the Seventies, but it has still taken its ravaging toll on the spending power of £1 in the years since 1983.

While recent years have seen inflation dropping to levels near or around zero, the original pound coins have lost much of their value.

According to the Bank of England’s inflation calculator, you’d need £3.10 to purchase the equivalent goods and services today as you could have bought for £1 in 1983.

But that rate of decline is gentle compared to the inflation consumers had suffered in the Seventies. In April 1983, when asked about the decline of the pound, officials said that a £1 note had declined in real value to 24p since February 1971, when decimalisation was introduced.

Those troublesome Latin (and Welsh) inscriptions

Shortly after the current £1 coin’s first appearance in April 1983, a mystified public began asking about the meanings of the inscriptions on the coins’ wide rims.

One Telegraph reader phoned our offices, then still in Fleet Street, having first tried the British Library. His quest was to discover the meaning of “Decus et Tutamen”, the inscription written on the edge of the new, fat coin. The fact that the British Library had failed to satisfy his query – while staff at the Telegraph had – made for a small mention in the letters pages.

This sparked a spate of correspondence. One reader explained that the motto, which means “an ornament and a safeguard”, was shared by the Worshipful Company of Feltmakers of London, where it was apparently an apt description of a good hat.

The Royal Mint said of the inscription at the time: “It was first adopted on coins in the time of Charles II and is a quotation from Virgil’s Aeneid. It was engraved around the edges of five-guinea pieces and crowns to prevent filing and clipping. Its use on the £1 coin is to safeguard against counterfeiting because engraving in this way remains difficult to reproduce.”

But there were other inscriptions. These included the Welsh “Y Ddraig Goch Ddyry Cychwym”, which means “The red dragon shall lead” – the motto of Cardiff.

Is it worth keeping any of the existing £1 coins?

The existing £1 coin is generally regarded as highly successful, despite the ability of forgers to replicate it with apparent ease (see box, below).

Old £1 coins
Existing range of £1 coins made between 1983 and 2015

Chris Barker, curator at the Royal Mint Museum, said the fact that original 1983 coins remained in circulation was a “testament to how successful it has been”. But, unlike other coins, including a limited number of 20p pieces which bear no date, there have been no known errors on £1 coins. This limits their collectability.

“The popular urban myth I always try to counter is that if the edge inscription is upside down in relation to the Queen’s head, it’s rare,” Mr Barker said. “It’s complete rubbish, as the orientation of the text to the Queen’s head is completely random.”

There have been a total of 25 different formats of £1 coins since 1983, from a total of nine designers.

They were intended to represent different regions or aspects of Britain, and so included a range of emblems including flowers, trees, architectural sites and coats of arms.

The smallest issue of any one of these designs is estimated to be 900,000.

Additional reporting by James Connington

New £1 coin: everything you need to know

When does the new £1 coin come in?

The new 12-sided coin will be put into circulation from March 28 2017, with the Royal Mint producing 1.5bn of the new coins before then. However, it will take about a month for the new coins to reach most banks and shops.

Why are the coins being replaced?

The existing round pounds are too easily faked, said the Royal Mint. Around one in 30 current £1 coins in circulation today are counterfeit. The Royal Mint has created a much more secure coin, making it harder to replicate.

The new features include a hologram image on the coin, micro-lettering on the side and a “hidden high security feature” that the Royal Mint is not revealing.

What will the new coin look like?

The coin has 12 sides, is made of two metals and has a new design. The coin design came from David Pearce, who won a contest at the age of 15. It has the English rose, the Welsh leek, the Scottish thistle and the Northern Irish shamrock emerging from one stem within a royal coronet.

Will all shops be ready to accept the new coins?

Businesses have been told about the new coins and that they need to prepare. However, some equipment, such as vending machines, self service checkouts and parking ticket payment machines, needs to be updated.

Other side of new £1 coin
Other side of new £1 coin

The Royal Mint warned that not all machines would work with the new coin from March 28. If customers have problems with machines not accepting either the new or old coins, they must deal with the machine operator directly.

All the leading supermarkets have said their shopping trolleys would be ready to receive the new coin from the day of launch. The Royal Mint said: “Some machines will only ever be able to accept either the new 12-sided coin or the existing, round coin.”

When is the old one going to be withdrawn?

From October 15 2017 the old £1 can no longer be used in shops. From then you can still take them to banks or the Post Office to get them changed for new versions. However, the Royal Mint would “encourage you to use your coins or return them to your bank” before this date. According to Mastercard there is £1.1bn sitting in the old style coins in people’s homes. Its survey showed that 87pc of people were not aware that they needed to cash them in.

What happens if I find old-style £1 coins after October 15?

These cannot be spent in shops but you can still deposit the money into most high-street banks. Presumably this will be temporary, but the Royal Mint did not say when it would end and said specific arrangements might vary from bank to bank.

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