Cash (banknotes and coins) remains by far the most commonly used payment type for everyday purchases. Using it couldn’t be simpler. It's almost always used face-to-face and you can physically see the money being handed over (and get any change straight away too).

There are eight coins and four different banknotes in England and Wales: £50, £20, £10 and £5 notes; £2, £1, 50p, 20p, 10p, 5p, 2p, 1p coins. New bank notes and a new coin are entering circulation between 2016 and 2020. The new £5 note was introduced in September 2016; the new £10 note is expected in summer 2017; and the £20 note in 2020. There will also be a new 12-sided £1 coin from 28th March 2017 with enhanced security features to tackle the significant amount of fraudulent circular £1 coins currently in circulation.

 

What would I use this for?

  • Cash is used every day for all types of transactions such as in shops, restaurants, coffee shops and pubs. It’s also the easiest way to transfer money between people – you can simply hand over banknotes or coins.
  • Cash can also be used in vending machines to buy things – for example, parking tickets, train tickets, food and drinks. 

 

How do I use it?

  • Cash machine (also known as an ATM): A self-service machine allowing cardholders with a PIN to withdraw cash from their account. Your bank will allow you to withdraw cash from its own cash machines and you will generally also be able to use cash machines belonging to banks and building societies other than your own. Besides withdrawals, other services – such as checking your balance and even donating to charity – are also available on some cash machines. There were over 70,000 cash machines in the UK at the end of 2016. Click here to find your nearest cash machine
  • Cashback: When purchasing goods with a debit card, some retailers (generally supermarkets), offer a cashback service. This enables a customer to add a cash value to the transaction and obtain the cash at the checkout, as an alternative to using a cash machine. The transaction value and the cash value will be debited directly from the cardholder’s bank account. Cashback is only available on debit cards. An alternative use of the expression ‘cashback’ refers to the feature offered on some credit card accounts of refunding a cash sum to cardholders based on a percentage of their spending. This is similar to other reward schemes such as Air Miles or points.
  • Bank counter withdrawal: Holders of accounts at banks, building societies and credit unions can withdraw cash from their accounts at their bank's branch. Some banks will allow withdrawals to be made using a cheque but the most common way of obtaining cash over the counter is by using your debit card. Those who have savings accounts with passbooks can also withdraw this way. More information on cheques can be found on the Cheque and Credit Clearing Company website by clicking here.
  • Post Office counter withdrawal: Customers of some banks and building societies can withdraw cash from their accounts at Post Office counters. These can be made using debit cards at the counter. Not all banks offer this service so it’s best to check you can use this service before you go. The Post Office has a list of the banks and building societies for which it provides this service here.
  • Emergency cash: If your card has been lost or stolen, certain bank accounts will be able to offer you ‘emergency cash’ (provided you have enough funds in your account). 
  • From another person: Cash is frequently used for small payments between individuals for everything from settling debts to paying allowances or in exchange for goods or service.

 

Security

  • It’s usually not a good idea to carry large amounts of cash around. If it is lost or stolen it’s unlikely to be covered by insurance. Some home insurance policies will cover you for lost or stolen cash – although typically for a few hundred pounds at most.
  • There is no insurance cover for accepting counterfeit (fake) money.
  • Counterfeit notes are worthless and it is a criminal offence to pass them on. If you suspect a note is counterfeit, take it to the police. They will give you a receipt and send the note to the Bank of England for analysis. If the note is genuine, you will be reimbursed.

 

Useful information

  • In England and Wales, banknotes are issued by the Bank of England and in Scotland and Northern Ireland, a number of banks are authorised to issue their own notes, which are legal currency throughout the United Kingdom. Coins are issued by the Royal Mint.
  • There’s a very strict legal definition of legal tender but put simply, when someone is demanding a payment they have the right to accept any form of payment whether legal tender or otherwise, so these limits need not be strictly enforced.
  • £2 and £1 coins are ‘legal tender’ in unlimited amounts; 50p and 20p coins are legal tender in amounts up to £10; 10p and 5p coins are legal tender in amounts up to £5; and 2p and 1p coins are legal tender in amounts up to 20p.