A 5-year long concerted effort of the Bank of England with participation of major UK banks and building societies to improve deteriorating quality and volumes of circulating £5 notes is evidently paying off. In yesterday’s press release the Bank of England announced success in its initiative to increase the availability of good quality £5 notes. A major part of the initiative was setting a target for ATM operators, both financial institutions and independent deployers, to dispense at least a minimum percentage of £5 denomination (1.2% of total withdrawal value).
According to the UK Payments Council statistics, ATM withdrawals account for over 80% of the total cash acquired by individuals in the UK. Previously, a typical UK ATM was almost invariably configured to dispense only £10 and £20 notes, which is more economical than £5, with a very few exceptions, such as university campus sites where £5 notes were sometimes dispensed, and some busy London shoppings districts where £50 notes were used to reduce replenishment frequency. Not being present in ATMs, over the years the £5 note was obtained by the public mainly as change in retail transactions and the quality and circulating numbers deteriorated rapidly.
As a result of the Bank’s initiative, nearly ten times as many £5’s are now dispensed by ATMs in comparison to 2010 when the first pilot project began. This is clearly a significant progress, which will hopefully be soon reflected in the increasing proportion of £5’s in circulation. So far the share of £5 notes in the total value of cash in circulation improved marginally from 2.5% to 2.7% in the last 2 years, with £20 notes continuing to dominate the currency structure representing over 60% of total cash value.