History of Banknotes in the United Kingdom

The History of Banknotes in the United Kingdom

The first Bank of England note to feature a monarch’s portrait appeared in the 1960s. This blog explores the history of banknotes and how they evolved.

The Birth of the Bank of England

Bank of England

The Bank of England was founded in 1694, at a time of financial crisis. Following the English Navy’s defeat at the Battle of Beachy Head in 1690 during the Nine Years’ War, the government urgently needed funds to rebuild the fleet and counter the French. With poor credit and limited borrowing power, the government struggled to raise the required £1.5 million.

The idea of a national bank was first outlined in 1691 by William Paterson, who proposed in his pamphlet A Brief Account of the Intended Bank of England (1694) that a public transferable fund of interest should be established, managed by a society of “money’d men” who would exchange assignments on the fund for money when required.

The scheme required the government to guarantee interest payments from a reliable source of income. It was decided this would be covered by tonnage and shipping duties, collected by the Exchequer. The proposal was formalised in the Tonnage Act of 1694, which authorised raising £1.5 million for the war effort in exchange for duties on shipping, beer, ale, and other liquors.

On 27^th July 1694, King William III granted a Royal Charter to the new Bank of England, in return for a £1.2 million loan to restore the nation’s finances. Remarkably, the full subscription was raised within ten days. The Bank of England was incorporated that July, beginning operations as a private institution. It remained privately owned until nationalisation in 1946.

Early Banknotes

Banknotes in England date back to the 1660s. By 1697, the Bank of England was issuing “running cash notes,” the forerunners of modern banknotes and the first to bear the promise to pay the bearer on demand.

• 1732 – the first £50 notes were printed, featuring the Britannia medallion and the words “Promise to Pay.”
• 1767 – Accountable Notes were introduced, given to those who deposited money with the bank.
• 
  1793 – During the French Revolutionary Wars, gold shortages prompted the Bank to issue the first £5 notes, which circulated until 1957.
• 1855 – the artist Daniel Maclise redesigned the Britannia medallion used on notes.

Until the Bank Charter Act of 1844, privately owned banks in Great Britain and Ireland could issue their own notes. The Act restricted this right exclusively to the Bank of England, preventing new banks from entering the note-issuing market.

Monarchs on Banknotes

While monarchs had appeared earlier on Scottish notes (George II, George III, and George IV), and George V featured on British Treasury notes between 1914 and 1928, it was not until 1960 that the Bank of England issued its first notes bearing the portrait of a reigning monarch: Queen Elizabeth II.

Banknote Series and Designs

Series C (1960s–1970s)

• 10/- and 50p notes (Sir Walter Raleigh) – never issued.

• 

  £1 (Sir Isaac Newton, after Sir Godfrey Kneller) – issued 1978, withdrawn 1988.
• £5 (Duke of Wellington, after Sir Thomas Lawrence) – issued 1971, withdrawn 1991.
• £10 (Florence Nightingale) – issued 1975, withdrawn 1994.
• £20 (William Shakespeare, after William Kent and Peter Scheemakers) – issued 1970, withdrawn 1993.
• £50 (Sir Christopher Wren, after Sir Godfrey Kneller) – issued 1981, withdrawn 1996.

Portraits of the Queen in this series depicted her wearing the Garter mantle and Diamond Diadem (artist: Harry Eccleston).

Series E (1990s)

• £5 (George Stephenson, by Charles Turner) – 1990–2003.
• £10 (Charles Dickens, by John Watkins) – 1992–2003.
• £20 (Michael Faraday, by Henry Dixon) – 1991–2001.
• £50 (Sir John Houblon, by Robert Grave) – 1994–2014.

The Queen’s portrait showed her wearing the Girls of Great Britain and Ireland Tiara (artist: Don Ford).

Series E (Variant)

• £5 (Elizabeth Fry, after Charles Robert Leslie) – 2002–2017.
• £10 (Charles Darwin, after Julia Margaret Cameron) – 2000–2018.
• £20 (Sir Edward Elgar) – 1999–2010.
• £50 – never designed.

Series F

• £20 (Adam Smith, by James Tassie) – 2007–2022.
• £50 (Matthew Boulton and James Watt, after William Ridley and Sir Thomas Lawrence) – 2011–2022.

Series G I (Queen Elizabeth II)

• £5 (Winston Churchill, after Yousuf Karsh) – 2016–present.
• £10 (Jane Austen, after James Andrews) – 2017–present.
• £20 (J. M. W. Turner, self-portrait) – 2020–present.
• £50 (Alan Turing, after Elliott & Fry) – 2021–present.

Series G II (King Charles III)

• £5 (Winston Churchill) – issued 2024, in circulation.
• £10 (Jane Austen) – issued 2024, in circulation.
• £20 (J. M. W. Turner) – issued 2024, in circulation.
• £50 (Alan Turing) – issued 2024, in circulation.

These are the first Bank of England notes to feature King Charles III.

The Future of Money

From handwritten promises to polymer notes featuring modern security features, the history of banknotes reflects changes in society, technology, and monarchy. As digital payments continue to grow, the question remains: what role will physical money play in the years ahead?