Celebrating the Anniversary of Decimalisation

As a student it’s important to manage your money and make sure that your fees and bills are paid promptly, whilst also leaving yourself enough to buy food and, of course, do some socialising. You may rarely carry cash as card payments dominate for most purchases, but some people and businesses still prefer to use cash. In the UK at the beginning of the 1970โ€™s using cash was the norm, but changes were about to be made to the existing currency. 15th February is the anniversary of the date the UK changed its currency, sterling, from the old pounds, shillings and pence to decimal currency (units related by powers of 10). Before this, the currency used was not as straightforward and consisted of a baffling array of coins. Using the decimal system made calculations much easier as you will see…

Background

Pre-decimalisation coinage was introduced by King Henry II of England and was based on the troy system of weighing precious metals. A penny was one pennyweight of silver. A pound sterling weighed 240 pennyweights or a pound of sterling silver. Pounds were divided into twenty shillings, shillings into twelve pennies, pennies into two halfpennies and four farthings.

All these amounts of money had corresponding coins and to make matters more complicated there were even more – 2 sixpences made a shilling, 5 shillings made a crown and there were half crowns, florins and groats. By 1971 many of these coins had been phased out.

Attempts to change

Proposals to decimalise sterling were first made in Parliament in 1824 and there were many more attempts to legislate for conversion throughout the 19th and 20th centuries. The successful transition to decimal currency in South Africa led the UK government to set up the Committee of the Inquiry on Decimal Currency, known as the Halsbury Committee. In 1963 the Halsbury Committee published its findings. Lord Halsbury concluded that due to the poundโ€™s importance as a global reserve currency it should remain the main unit of currency. A series of new decimal coins would be created, and all existing coins would either be replaced or phased out.

Change happens

It was in 1966 that decimalisation was finally debated and then legislated on in May 1969 with the approval of the Decimal Currency Act. On 15th February 1971 the switch over took place. February had been chosen because it was assessed to be the quietest time of the year for banks, shops and transport organisations. Banks were closed for 4 days before the changeover.

Public reaction to the prospect of a new currency was mixed. Many thought they would find it confusing. Others thought that shopkeepers would use the introduction as a way to put prices up. Shops often displayed prices in both currencies. Currency converters were available for the public, but most people didnโ€™t have any difficulties. For a short time, the old and new currencies operated in unison – people could pay in pounds, shillings and pence and receive new decimal money as change. It was originally planned that old money would be phased out of circulation over a period of eighteen months, but as it turned out, the old penny, halfpenny and threepenny coins were officially taken out of circulation as early as August 1971.

Today

Although we still have decimal currency, card payments make up the majority of transactions, but some people still prefer to use cash. They feel it makes budgeting easier as they only spend the cash they have taken out from a bank or ATM. Whichever method of payment you prefer you will no doubt agree that the decimal currency is much easier to calculate.

You can use Library Search find books and articles on finance, banking and student finance.

In My Napier webpages there are articles providing information, guidance and support to a wide range of finance-specific information.

If you would like free advice on help with financial issues you can contact Citizens Advice who may be able to assist. Remember to take along any documents relevant to your query.

Read more on the library blog. Check out our article on: The Dewey Decimal Classification System

By Vivienne Hamilton