The Bank of England has issued a fresh warning that two high-value banknotes won’t be spendable for much longer. So if you’re the type to carry cash, now is probably a good time to check your wallet!
Here’s the lowdown on which banknotes are affected. Plus, what you can do if you hold expired currency.
What is the Bank of England’s warning about?
The Bank of England has warned that specific types of £20 and £50 banknotes will be withdrawn next year. In other words, if you have ‘soon to expire’ banknotes, time is running out to spend them.
The warning comes at a time when cash usage is already declining across the UK. According to the Financial Times, the number of cash payments dropped by a whopping 35% during the pandemic as consumers switched in their droves to plastic methods of payment.
Recent banknotes withdrawn include paper £5 and £10 notes. These withdrawals came after the UK decided to switch its currency to polymer technology. The paper fiver was withdrawn in May 2017, while the paper tenner was removed from circulation in March 2018.
Polymer banknotes are already common throughout the world. The main reason for this is that they are more durable than paper money. Polymer notes are also far more difficult to counterfeit.
Which banknotes are set to expire?
Banknotes that are set to expire include paper £20 and £50 notes. Retailers will stop accepting these notes as a method of payment from 30 September 2022.
This means that Christmas 2021 presents the last opportunity for British consumers to complete their festive shopping with paper money.
Discovering whether you’ve got an older £20 or £50 shouldn’t be too difficult. They are larger in size than the newer notes, and lack the smooth ‘plastic’ feel of polymer notes.
What if you still have paper £20 or £50 banknotes after they expire?
If you’re in possession of paper £20 or £50 notes after 30 September 2022, you won’t be able to spend them in UK retailers. That’s because they will no longer be considered legal tender.
Despite this, the Bank of England is keen to stress that older banknotes can be exchanged. Similar to when the older £5 and £10 banknotes were withdrawn, many UK banks will happily exchange older notes for you. However, some banks may only do this for their own customers.
Aside from your bank, the Post Office is another option to exchange your older cash. That’s because the Post Office has a little-known Everyday Banking service that allows you to pay in cash, withdraw money and check your balance for free. As a result, it’ll be possible to exchange your old notes at a Post Office branch if the need arises.
So while keeping hold of expired notes can be a faff, you’ll always be able to exchange them for new notes with relative ease.
Should you keep old banknotes?
Despite the fact that days are numbered for true ‘paper’ money, some collectors may wish to keep older currency with the hope of making a few bob in the future.
Older currency can certainly increase in value over time. However, accurately predicting which notes will be sought after in the future is a difficult task. That being said, if your gamble doesn’t pay off, you always have the option of exchanging them for their original face value.
It’s also worth knowing that it’s not only expired currency that can grow in value. New banknotes can attract the attention of keen collectors too. For example, following the launch of the new £5 note, it was reported that fivers with low or unusual serial numbers were fetching hundreds of pounds.
For more money tips, see The Motley Fool’s latest personal finance articles.
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