Get Started

Feb 01, 2021 | Foreign Exchange

LSD: We’re talking about Pre-decimal British coinage, not mood changing chemicals

As a business we have many years’ experience of dealing with currency exchange rates across international money markets. This year marks the 50th anniversary of Decimalisation Day so we thought we’d take a quick journey back to the time when UK businesses and consumers alike were calculating the switch from “old money” to “new money”.

What did the Romans do for us?

For centuries, British money had been based on a system reputed to have been introduced by the Romans. The currency was divided into pounds, shillings, and pence with the names of the coins being derived from the Latin words for pound ‘Librae’ (the pound symbol itself is an elaborate letter L) , shilling ‘Solidi’ and ‘Denarius’ for pennies, or £:S:D for short.

Pounds, shillings, and pence were not the only denominations in circulation pre-1971, and the U.K. had a familiar and well-loved selection of coins and notes, many with their own nicknames, that had been in use for generations. They may have been out of circulation for 50 years now, some even longer, but they are still very much a part of British culture appearing in nursery rhymes, literature, films, and songs.

Twelve was the magic number

Back then, 240 pennies were in a pound, and 12 pennies were in a shilling and of course a pound was equal to 20 shillings. The twelve times table was the order of the day for this pre-decimal system. Know that, and you could easily navigate your way through the maze that was Fadges, Ha’pennies, Thrupenny Bits, Tanners and Bobs.

A Farthing (an old English word for “four things” often referred to as a Fadge) was a quarter of a penny, written as ¼d. Before being taken out of circulation in 1960, two Farthings were in a Half Penny (Ha’penny), and obviously, two Ha’pennies made a Penny.

3d was represented by the Threepence coin, (known as Thruppence or a Thruppenny Bit) and two Thruppenny Bits were equivalent to a Sixpence. Nicknamed a Tanner, the Sixpence had the value of half a Shilling.

So, two Sixpences were in a Shilling, affectionately known as a Bob. The next coin up was the Two Shilling coin known as a Florin, the same value as 24d. Add a Sixpence to a Florin and you’d have 30d, the equivalent of Two and Six, (written 2/6) meaning two Shillings and Sixpence…and you could exchange that for Half a Crown, a.k.a. Half a Dollar.

Two Half Crowns made a Crown, (or 5 Bob, or 60d) and Crowns were also known colloquially as a Dollar. Two Crowns were equivalent to ten Shillings and you could switch them for a Ten Shilling (or Ten Bob) note, not a Nine Bob note…anything referred to as “bent as a Nine Bob note” was considered to be fraudulent and dishonest as a Nine Shilling note did not exist.

Two Ten Shilling notes equalled a Pound, or a Quid, (or a Nicker) and if you needed to break that Pound back down into change you could do so by accepting 10 Florins, 20 Bob, 40 Tanners, 80 Thruppenny Bits, 240 pennies, 480 Ha’pennies or if you had well lined and large pockets, 960 Fadges.

Preparation and planning.

Decimalisation day was fixed for 15th February 1971 and was widely referred to as “D-Day”. February was selected because general opinion considered it to be one of the quietest times for businesses, banks, shops, and the nation’s public transport networks. The plan was for the changeover to proceed with minimum disruption to daily life.

The Royal Mint at Tower Hill was considered too small to manage the production and distribution of the vast quantities of new coins required, and with no room for expansion, the whole operation was moved to Llantrisant in Wales, into new purpose-built premises in the latter part of the 1960s.

To help ease the public into the new system, some of the new coins were introduced in 1968 with the circulation of the new 5p and 10p pieces running alongside the existing Shilling and Florin. They were the same size as the coins they were to replace and could be used interchangeably. In late October 1969, the new seven sided 50 pence coin also entered circulation and as the months rolled by towards D-Day, Ha’pennies, Half Crowns and Ten Bob notes started to be gradually withdrawn. On D-Day itself a further 3 new coins were put into circulation, the Half New Pence, One New Pence and Two New Pence pieces.

Publicity campaigns were run on radio and television and a great deal of responsibility for a smooth changeover was apportioned to the banks and financial institutions of the time who of course would be required to ensure that decimal cash supplies were in place. The logistical challenges associated with just delivering this amount of new money to these institutions was enormous with fleets of vehicles racing around the country ensuring banks had what they needed ahead of D-Day. The banks also needed time to amend their bookkeeping and accountancy machines and computer systems, so were allowed to close at 3.30pm on 10th February, not reopening until 10.00 am on 15th February.

Some banking operations could not be completed until the very last minute, so many institutions worked through the night of 14th February to ensure that all outstanding payments were processed, avoiding any confusion or mix up between old and new money.

The careful and thorough planning paid off and, on the day, overall, the switch to “New Pence” went ahead pretty much without a hitch. The cost of the change was put at £128m for industry and £23.5m for the Government…considering inflation since 1971, that is the equivalent of roughly £1.5bn and £293m today. Or if you want that in old money it is 30bn Bob and over 11.7bn Tanners.

D-Day and beyond

Post D-Day, consumers waited anxiously to see if their fears of post decimalisation inflation were to be realised. Old coin denominations often converted to new pence as whole units with fractions of units, and there was a suspicion that shops would “round up” the cost of smaller items in order to take advantage of the confusion amongst shoppers getting to grips with the new system.

To help allay these fears, the government had decided to keep the Sixpence, now worth 2½ New Pence. It was thought that if phone boxes, on street parking meters and vending machines, all switched to taking the new 5p coin only, there would be an instant doubling in prices for those services. Keeping the Sixpence, it was hoped, would help avoid this type of scenario and keep consumers happy. The “Save the Sixpence” campaign was well received, everyone loved the Tanner, and the coin stayed in circulation until 1980.

However, prices after February 15th began to soar and inflation took root as the 1970s moved on. Decimalisation was blamed as one of the main reasons for this although rising oil prices (oil prices tripled in the 1970s) and rising wages were also key factors.

The country soon got used to the new system though people would often be heard asking “what’s that in real money” when discussing prices, and of course many sayings and phrases in the English language still relate to the old £-S-D. Spend a penny; A penny for your thoughts; It can turn on a sixpence; Take the King's shilling. Also many a mention in nursery rhymes: Sing a song of sixpence; Oranges and Lemons –“you owe me five farthings say the bells of St Martins…”; Pop goes the weasel- “Half a pound of Tu’penny rice…”.

The Sixpence, though commonly known as a Tanner was also referred to as a Bender as it could be bent and broken in half by hand due to being made of silver. Sixpence was all you needed for a very good night out back in the day, with some taverns allowing all day drinking for Tuppence (2d)…hence the term “going on a bender”.

So, it’s now fifty years since decimalisation…the United Kingdom had adopted the decimal system that was already in place across most of Europe and the world, in readiness for its entrance into the European Economic Community (EEC) in 1973. This became the European Community (EC) and would eventually be known as the EU.

Now in 2021 we see the United Kingdom having left that community and looking to find its way with new trade agreements and arrangements with individual countries rather than the bloc as a whole. Let us hope the planning has been as thorough, and the changeover runs as smoothly as it did in 1971.