The pound sterling (symbol: £; ISO 4217 currency code: GBP) is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, British Antarctic Territory, South Georgia and the South Sandwich Islands, and Tristan da Cunha. Various banknotes are used within the United Kingdom. The Bank of England has a legal monopoly of banknote issuance in England and Wales, but not in Scotland and Northern Ireland, where three banks in Scotland and three in Northern Ireland, issue their own banknotes as provisioned by the Banking Act 2009. However, the law requires that the issuing banks in Scotland and Northern Ireland hold a sum of Bank of England banknotes (or gold) equivalent to the total value of notes issued.

Versions of the pound sterling issued by Crown Dependencies and other areas are regulated by their local governments and not by the Bank of England. Four British Overseas Territories (Gibraltar, Saint Helena, Ascension Island and the Falkland Islands) also have currencies called pounds which are at par with the pound sterling.

Currently circulating Bank of England notes

The pound sterling banknotes in current circulation consist of Series G Bank of England notes in denominations of £5, £10, £20 and £50. The obverse of these banknotes issued until 4 June 2024 feature the portrait of Elizabeth II originally introduced in 1990. Starting on 5 June 2024, the Bank of England began issuing notes featuring a portrait of Charles III, which will circulate alongside the Elizabeth II notes and gradually replace them. Select banks in Scotland and Northern Ireland also issue their own banknotes at par with Bank of England issues. Scottish and Northern Irish notes, which are not legal tender but are promissory notes, are occasionally rejected as payment in England by merchants unfamiliar with them, and are likely difficult or impossible to exchange outside Britain.

Value Dimensions Main colour Reverse figure Issue date Series G polymer banknotes£5 Turquoise/Blue 1941 portrait of Winston Churchill by Yousuf Karsh, the Elizabeth Tower, and the maze at Blenheim Palace, the quote "I have nothing to offer but blood, toil, tears and sweat." from a 1940 speech by Churchill, and the Nobel Prize medal. 13 September 2016£10 Orange Portrait of author Jane Austen by James Andrews, based on a portrait by her sister, Cassandra (c. 1810), the quote "I declare after all there is no enjoyment like reading!" from Pride and Prejudice, an illustration of Elizabeth Bennet and a view of Godmersham Park in Kent. 14 September 2017£20 PurpleSelf-portrait of artist J. M. W. Turner (c.1799), a version of Turner's The Fighting Temeraire, the quote "Light is therefore colour" from an 1818 lecture by Turner, and a copy of Turner's signature as made on his will. 20 February 2020£50 Red 1951 photographic portrait of mathematician and computer science pioneer Alan Turing with formulae from Turing's proof and technical drawings for the Bombe, the quote "This is only a foretaste of what is to come and only the shadow of what is going to be" from a 1949 interview with The Times, over a background of Pilot ACE. 23 June 2021

History

Until the middle of the 19th century, privately owned banks in Great Britain and Ireland were free to issue their own banknotes. Paper currency issued by a wide range of provincial and town banking companies in England, Wales, Scotland and Ireland circulated freely as a means of payment.

As gold shortages affected the supply of money, note-issuing powers of the banks were gradually restricted by various acts of Parliament, until the Bank Charter Act 1844 gave exclusive note-issuing powers to the central Bank of England. Under the act, no new banks could start issuing notes; and note-issuing banks gradually vanished through mergers and closures. The last private English banknotes were issued in 1921 by Fox, Fowler and Company, a Somerset bank.

However, some of the monopoly provisions of the Bank Charter Act 1844 only applied to England and Wales. The Bank Notes (Scotland) Act 1845 was passed the following year, and to this day, three retail banks retain the right to issue their own sterling banknotes in Scotland, and four in Northern Ireland. Notes issued in excess of the value of notes outstanding in 1844 (1845 in Scotland) must be backed up by an equivalent value of Bank of England notes.

Following the partition of Ireland, the Irish Free State created an Irish pound in 1928; the new currency was pegged to sterling until 1979. The issue of banknotes for the Irish pound fell under the authority of the Currency Commission of the Republic of Ireland, which set about replacing the private banknotes with a single Consolidated Banknote Issue in 1928. In 1928, the Currency and Bank Notes Act 1928 reduced the fiduciary limit for Irish-bank issued sterling banknotes circulating in Northern Ireland to take account of the reduced size of the territory concerned.

Elizabeth II was not the first British monarch to have her face on UK banknotes. George II, George III and George IV appeared on early Royal Bank of Scotland notes and George V appeared on 10/– and £1 notes issued by the British Treasury between 1914 and 1928. However, prior to the issue of its Series C banknotes in 1960, Bank of England banknotes generally did not depict the monarch. Today, notes issued by Scottish and Northern Irish banks do not depict the monarch.

The monarch is depicted on banknotes issued by the Crown dependencies and on some of those issued by overseas territories.

+ Key events and acts of Parliament that affected the course of banknote history in Great Britain and IrelandYearEventExtentImpact1694Bank of England Act 1694England & WalesIncorporation of the Bank of England.1695Bank of Scotland Act 1695ScotlandCreation of the Bank of Scotland, principally as a trading bank.1696First banknotes issued by the Bank of ScotlandThe first sterling notes issued1707Acts of Union 1707English and Scottish parliaments merged into the Parliament of Great BritainEngland & WalesProhibition of companies or partnerships of more than six people to set up banks and issue notes, preventing smaller banks from printing their own money.1727Chartering of the Royal Bank of ScotlandScotlandBroke the monopoly of the Bank of Scotland, initiated the banking war when the Royal Bank attempted to drive the Bank of Scotland out of business by stockpiling and then presenting its notes for payment.1765Bank Notes (Scotland) Act 1765Prohibited deferred conversion of notes into coin and the issue of notes for values under £1 by banks in Scotland.1801The Act of Union was passed in August 1800, but came into force on the following 1 January.Act of Union 1800Great Britain & IrelandBritish and Irish parliaments merged into the Parliament of Great Britain and Ireland1826Country Bankers Act 1826England & WalesAllowed joint-stock banks with more than six partners which were at least 65 miles away from London to print their own money. Bank of England allowed to open branches in major English provincial cities, enabling wider distribution of its notes.Great BritainProhibition of circulation of notes under £5 in England. Attempts to apply this law in Scotland fail after a protest by Sir Walter Scott, and the Scottish £1 note is saved.1833Bank Notes Act 1833England & WalesGave Bank of England notes official status as legal tender for all sums above £5 in England and Wales to guarantee public confidence in the notes even in the event of a gold shortage.1844Bank Charter Act 1844UKTook away the note-issuing rights of any new banks; existing note-issuing banks barred from expanding their issue. Began the process of giving the Bank of England a monopoly over banknote issue in England and Wales.1845Bank Notes (Scotland) Act 1845ScotlandRegulated the issue of notes in Scotland; most Scottish banknotes had to be backed by Bank of England notes1908Bank closureWalesThe last private note issuer in Wales, the North and South Wales Bank, loses its note-issuing rights under the 1844 act after it is acquired by Midland Bank.1914Currency and Bank Notes Act 1914UKHM Treasury given powers to issue banknotes to the values of £1 and 10/– in the UK (ended 1928)1921Bank closureEnglandThe last private note issuer in England, Fox, Fowler and Company of Somerset, loses its note-issuing rights under the 1844 act after it is acquired by Lloyds Bank.1928Irish pound establishedIrelandFollowing the Partition of Ireland, the Irish pound is established as a separate currency (at parity with sterling until 1979); Northern Ireland remains within sterling1954Currency and Bank Notes Act 1954UKExtended the Bank Notes Act 1833 to make Bank of England notes under £5 in value legal tender; the act also applied to Scotland, making English 10/– and £1 legal tender for the first time. Bank of England withdrew low-denomination notes in 1969 and 1988, removing legal tender from Scotland.2008Banking Act 2009A consequence of the 2008 financial crisis, this act altered the rules governing the issue of private banknotes in Scotland and Northern Ireland, and requires commercial issuing banks to hold backing assets to protect the value of their notes in the event of commercial failure of the bank.

Everyday use and acceptance The wide variety of sterling notes in circulation means that acceptance of different sterling banknotes varies. Their acceptance may depend on the experience and understanding of individual retailers, and it is important to understand the idea of "legal tender", which is often misunderstood (see section below).

In summary, the various banknotes are used as follows: Bank of England banknotes Most sterling notes are issued by the Bank of England. These are legal tender in England and Wales. Bank of England notes are generally accepted in the Overseas Territories which are at parity with sterling. In Gibraltar, there are examples of pairs of automatic cash dispensers placed together, one stocked with Bank of England notes, and the other with local ones.

Scottish banknotes

Banknotes issued by Scottish banks are the recognised sterling currency in Scotland, although they are not legal tender (nor, in Scottish law, are Bank of England notes). They are always accepted by traders in Scotland, and are usually accepted elsewhere in the United Kingdom. However, some retailers outside Scotland may be unfamiliar with the notes and they are sometimes refused. Institutions such as clearing banks, building societies and the Post Office will readily accept Scottish bank notes. Branches of the Scottish note-issuing banks situated in England dispense Bank of England notes and are not permitted to dispense their own notes from those branches. Modern Scottish banknotes are denominated in sterling, and have exactly the same value as Bank of England notes; they should not be confused with the former pound Scots, a separate currency which was abolished in 1707.

Northern Irish banknotes

Banknotes issued by Northern Irish banks have the same legal status as Scottish banknotes in that they are promissory notes issued in pounds sterling and may be used for cash transactions anywhere in the United Kingdom. However, they are rarely seen outside of Northern Ireland. In England and Wales, although they might be accepted by any shop, they are often not accepted without explanation. Like Scottish notes, clearing banks and building societies will accept them. Northern Irish pound sterling banknotes should not be confused with the Irish pound (or punt), the former currency of the Republic of Ireland, which was replaced by the euro in 2002.

Banknotes of the Crown dependencies