Small businesses and consumers have been warned over millions of old five pound notes that will soon no longer be legal tender.
The Bank of England now estimates that there are 165 million of the old-style fivers still in circulation – nearly three for every person in the UK.
The notes will cease to be legal tender on 5 May, causing problems for both consumers who wish to spend them and cash-handling businesses.
The new five pound note, introduced last year, is made of polymer, which the government says will make it significantly more durable than the old version.
But the number of old-style notes still being used causes headaches for both consumers and business owners, with confusion over where they can be used and in what circumstances they can be exchanged.
The old-style five pound note remains legal tender until 5 May 2017. After this date, however, businesses are no longer obliged to accept them.
But what about old fivers that you have after that date? The Bank of England has an obligation to accept these notes, but the procedure for getting them exchanged can be complex.
In order to swap your fivers, you must use the Bank’s Exchanging Withdrawn Notes service. This can be done in person in London, or by post – but there are, of course, risks associated with posting large sums of cash. You can read more about the Exchanging Withdrawn Notes service on the Bank of England website.
The new fiver entered circulation on 13 September last year. The Bank of England say the new notes are significantly more durable, while new security features will make them harder to forge.
New five pound notes with early or unusual serial numbers have fetched significant sums at auction. The very first new fiver was given to the Queen, but others in the first run have been sold for as much as £4,000.
Small business owners should also be aware of changes to the one pound coin. In March, the ‘round pound’ will be replaced by a twelve-sided coin, which the Bank of England says will be much harder to forge.
But the change may cause problems for businesses that offer coin-operated services, including vending machines and shopping trolleys.
The vending machine industry has said that two visits will be required to update machines that take one pound coins – one to move away from the old coin, and a second to move to the new one.
However, repair company TVS recently told the Guardian that the procedure should cost no more than £100 per machine. The procedure for simpler machines, for example lockers and washing machines, should cost no more than £50.
Business owners should also keep an eye out for further new notes coming into circulation in the near future. A new polymer £10 note, with Jane Austen on the front, will enter circulation this summer, while a polymer £20 note, featuring artist JMW Turner, will be introduced by 2020.
Have you seen many old-style £5 notes recently? Let us know below.
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