Bank of England reveals that 10 times as many five-pound notes are now being issued than a year ago, addressing long-standing consumer complaints about a shortage
The fiver famine is officially over: the Bank of England has revealed that nearly 10 times as many £5 notes are now being dispensed by cash machines than in the summer of 2010.
For years, the shortage of £5 notes in circulation – and the tatty, held-together-with-tape state of many of them – has annoyed both the public and businesses. Shoppers complained about being lumbered with handfuls of pound coins as change because the retailer had run out of fivers.
In 2007, Bank of England governor Sir Mervyn King bemoaned the situation in a Mansion House speech, saying: “There has been much, and in my view justified, criticism of their availability and condition … The public need £5 notes.”
Five years on, the fortunes of the humble fiver have been transformed. In March 2010, the Bank told major financial institutions and cash machine operators to increase the proportion of £5 notes issued at ATMs. It revealed on Thursday that they have exceeded the minimum target set, and that fivers now make up 1.5% of notes dispensed by value.
Almost £200m of £5 notes are now dispensed by ATMs each month, and by March this year more than 5,000 cash machines were giving out fivers, compared to just 670 in 2009.
In total, around £4bn worth of £5 notes are expected to enter circulation in 2012, compared with just over £2bn in 2010.
In the past, cash machine operators have been partly blamed for the shortages. They are said to dislike fivers because they take up a lot of space relative to their value, meaning that busy machines are likely to run out sooner. Also, because £5 notes get used more regularly than higher denomination notes, they have a much shorter lifespan, with the average £5 note lasting for only one year before it becomes too damaged to use.
The Bank said it had also worked with the industry to improve the quality of the £5 notes in circulation.
Perhaps the announcement sends out two other signals, though: that the much-debated “death of cash” may be some years away, and that belt-tightening in the current climate means more people are watching the pennies and keen to withdraw smaller sums from ATMs.
Penny Stock Picks