Decimalization of the Pound: The UK’s Currency Conversion in 1971

For centuries, the British monetary system was a complex tapestry of pounds, shillings, and pence, a system that baffled foreigners and required considerable mental arithmetic from its own citizens. This all changed with the monumental decimalization of the pound in 1971, a pivotal moment that fundamentally reshaped daily commerce across the United Kingdom.

On a day dubbed ‘Decimal Day’ or ‘D-Day’, 15 February 1971, the nation officially switched from its ancient system of 240 pence to the pound to a simplified, modern standard of 100 pence to the pound. This guide explores the reasons behind this massive undertaking, the intricate pre-decimal currency, and the lasting legacy of one of the most successful national change projects in modern history.

A Look Back: The Complex World of Pre-Decimal Currency UK

Before 1971, the British pound sterling (£) was not divided into 100 units. Instead, it followed a centuries-old structure that could be confusing for those unfamiliar with it.

The system worked as follows:

• 1 pound (£) was equal to 20 shillings (s).
• 1 shilling (s) was equal to 12 pence (d).
• This meant that 1 pound (£) was comprised of 240 old pence (d).

This structure required constant conversion in daily transactions. Shoppers and retailers had to be adept at calculating in base 12 and base 20, a system that had deep historical roots but was increasingly impractical in a modernising world.

Old Currency Names UK: From Farthings to Crowns

The pre-decimal system featured a colourful cast of coins, many with names that evoke a bygone era. These coins were an integral part of British life, each with a specific value and place in the monetary hierarchy. Some of the most notable old currency names in the UK included:

• Farthing: Valued at ¼ of an old penny. It was last minted for circulation in 1956 and was officially demonetised in 1960.
• Halfpenny: Worth ½ of an old penny.
• Penny: The basic unit, often referred to as a “copper.”
• Threepence: A three-penny piece, affectionately known as a “thrupenny bit.”
• Sixpence: A six-penny coin, also called a “tanner.”
• Shilling: Worth 12 old pence. Twenty of these made a pound.
• Florin: A two-shilling coin.
• Half-Crown: Valued at two shillings and sixpence (2s 6d).
• Crown: A five-shilling coin, often minted for commemorative purposes.
• Guinea: Not a coin in circulation by the 20th century but still used as a unit of account, especially for luxury goods and professional fees. A guinea was worth 21 shillings.

Why Did the UK Go Decimal? The Long Road to Change

The conversation around decimalising British currency was not new; in fact, discussions began as early as 1824. However, the push gained serious momentum in the 1960s. The primary reasons for this monumental shift were practicality, efficiency, and international alignment.

The old system was cumbersome for accounting and education. Simple calculations could become complex, and the rise of computing made a decimal-based system far more logical. Furthermore, most of the world already used decimal currencies, and as international trade grew, aligning the UK’s system with its partners became a priority. The successful decimalisation in other Commonwealth countries provided a clear model for the UK to follow.

To oversee this immense project, the government established the Decimal Currency Board in 1967. Its task was to manage the transition, educate the public, and ensure a smooth changeover on the appointed day.

Preparing for the Decimalization of the Pound in 1971

Switching an entire nation’s currency required a massive logistical and educational effort. The government launched one of the most extensive public information campaigns in its history to ensure everyone, from children to pensioners, was ready for the change.

The campaign, detailed by archives like NatWest Group Heritage, used television, radio, and print media extensively. Memorable TV shows like “Decimal Five” and the short film “Granny Gets The Point” were created to explain the new system in simple terms. Posters and pamphlets were distributed widely, showing the new coins and their old-money equivalents.

Behind the scenes, banks undertook a colossal task. They closed from Wednesday, 10 February to Monday, 15 February 1971, to convert all customer accounts and internal systems from the old £sd format to the new decimal pounds and pence.

Phasing in the New Coins

To avoid a sudden shock to the system, the transition began years before Decimal Day. The first new decimal coins were introduced to circulate alongside their pre-decimal counterparts:

• In 1968, the 5p (five new pence) and 10p (ten new pence) coins were introduced. They were identical in size and value to the one-shilling and two-shilling (florin) coins, respectively, allowing them to be used interchangeably.
• In 1969, the 50p coin was introduced, replacing the ten-shilling note.

This phased approach allowed the public to become familiar with the new currency gradually. On D-Day itself, the new ½p, 1p, and 2p coins were officially released into circulation.

Life After D-Day: A New Monetary System

On 15 February 1971, all banks, retailers, and government bodies switched to the new decimal system. To help consumers adjust, prices in shops were displayed in both formats for a transitional period, a practice known as dual pricing.

The new coins were initially marked with the words “NEW PENCE” to distinguish them from the old pennies. This label remained on the coins until 1982, after which the text was changed simply to “PENCE.” The new system defined one pound as 100 new pence, with each new penny being worth 2.4 old pence.

The legacy of decimalisation is a vastly simplified monetary system that enhanced the efficiency of everyday transactions and modernised the British economy. The successful transition remains a case study in managing large-scale national change and was a critical step in the long history of the British pound sterling.

The History of Farthing and Shilling After Decimalisation

The fate of the UK’s old currency names varied. Some coins were withdrawn quickly, while others lingered on for years.

The farthing was already a piece of history by Decimal Day, having been demonetised over a decade earlier in 1960. Its value had been eroded by inflation, making it practically obsolete.

The shilling had a more interesting afterlife. Because the one-shilling coin was the same size and value as the new 5p coin, it continued to circulate as a 5p piece. It wasn’t until the 5p coin was resized in 1990 that the shilling was finally withdrawn from circulation, ending centuries of service. Similarly, the florin (two-shilling coin) was used as a 10p piece until that coin was also resized in 1992, a period that saw significant events impact the pound, such as Black Wednesday.

Other coins, like the sixpence, were briefly retained with a value of 2½ new pence before being officially withdrawn. The transition period marked a definitive end for most of the old coins, though their memory lives on in British culture and language, echoing past economic milestones like the discussions around the Maastricht Treaty.

Frequently Asked Questions

What was the UK currency system before decimalisation?

Before decimalisation, the UK used pounds, shillings, and pence. One pound was equal to 20 shillings, and one shilling was equal to 12 pence, making a pound worth 240 pence. Denominations included the farthing, penny, threepence, sixpence, shilling, florin, half-crown, and crown.

When did the UK officially go decimal?

The official date for decimalisation was 15 February 1971, known as Decimal Day or ‘D-Day’. This was the day the entire country formally switched to the new system where one pound equalled 100 new pence.

What happened to shillings and old coins after decimalisation?

Shillings and other pre-decimal coins were gradually withdrawn from circulation. Some, like the shilling and florin, were used temporarily as 5p and 10p coins because they matched in size and value. Most other coins were quickly phased out and ceased to be legal tender.

Why did the UK decide to decimalise its currency?

The UK decimalised its currency to simplify calculations, modernise financial transactions, and align its system with international standards. A decimal system was easier for accounting, computing, and trade with other countries that already used base-10 currencies. You can learn more about this process from historical sources like the Royal Mint Museum.

Conclusion

The decimalization of the pound in 1971 was more than just a change of coins; it was a fundamental modernisation of the British economy. By replacing the archaic system of shillings and old pence with a streamlined decimal format, the UK simplified life for consumers and businesses alike.

The transition, managed with remarkable foresight and a comprehensive public education campaign, stands as a landmark achievement. It closed a chapter on centuries of monetary tradition and paved the way for the financial system we know today, profoundly shaping the modern history of the pound sterling.