This summer the Queen celebrated an incredible 70 years on the throne. Since her reign began in 1952, the world has changed a lot – who in the 1950s would’ve thought it would be normal to carry a computer in your pocket that lets you make calls, access the internet, and a whole lot more?
During that time, money has changed enormously too, from how it looks right through to how we use it. Here are some of the ways money has changed during the Queen’s reign.
The changing portraits of the Queen
The Queen’s portrait has been a common feature on money for almost 70 years and there have been several changes over the decades.
It wasn’t until 1960 that the Queen’s portrait appeared on a note. The image of the young queen was used on £1 notes, and then a 10 shilling note in 1961. The portrait was criticised for being severe and having an unrealistic likeness.
An updated portrait used for £5 notes in 1963 received a more favourable response.
The current image on notes and coins has been used since 1990 and shows the Queen aged 64.
Adding the likeness of the monarch isn’t just for tradition. The Bank of England (BoE) explains that using a familiar image is a useful anti-counterfeiting feature. People can detect changes in pictures of faces, especially well-known ones, much more easily than in other types of patterns.
Modern polymer notes also use the Queen’s portrait on a small, see-through window with “£5 Bank of England” printed twice around the edge as a security feature.
Images: portraits of the queen used in 1960, 1963, and 1990.
Decimalisation day: Adopting a base-10 currency in 1971
Perhaps the biggest change to money in the last 70 years occurred on 15 February 1971, dubbed “decimalisation day”.
For centuries Britain had used a coinage system of pounds, shillings and pence – 12 pennies made a shilling, and 20 shillings made a pound.
After more than 50 years of dealing with a currency based on units of 10, it can be hard to appreciate the mental arithmetic older generations were adept at doing every time they made a purchase.
The debate of changing to a simpler currency had been going on since 1847.
An MP at the time, Sir John Bowring said: “Every man who looks at his 10 fingers, saw an argument for its use, and evidence of its practicability.”
A year later, the nation’s first decimal coin appeared – the florin, which was one-tenth of a pound. But that’s as far as decimalisation went until more than a century later.
While decimalisation day on 15 February 1971 was a milestone and represented a huge change, the transition was a little more gradual than the name suggests.
5p and 10p coins had entered circulation in 1968 and had the same value as shillings and florins. The last pre-decimal coin, the florin, wasn’t pulled from circulation until 1993. To help customers, some shops also ran dual prices for a while.
Even with a transition, it was vital that everyone knew about the change and how the new coins would work. So, the government commissioned performer Max Bygraves to record a song for the occasion.
The lyrics included: “They’ve made it easy for every citizen / ‘Cos all we have to do is count from one to ten!” And if you want a trip down memory lane, you can listen to the decimalisation song online.
The rise of cashless payments
In recent years, the shift towards not using money at all has accelerated, particularly during the last two years due to the pandemic.
Barclays issued the UK’s first credit card in 1966, with debit cards following in 1987. These first cards required a signature and used a magnetic strip that could be swiped.
This trend evolved over the decades, with chip and PIN introduced in 2003 and contactless payments in 2007.
With customers now able to make contactless payments up to £100, a life without physical money is already a reality for many people in the UK.
According to the latest figures from UK Finance, more than a quarter of all payments in the UK are made using contactless methods. In contrast, cash is falling out of favour. In 2010, it accounted for 56% of all payments, although by 2020 that had reduced to 17%.
Whilst cash is likely to play an important role for years to come, its use is becoming rarer.
Average annual inflation of 5.1% has affected how far your money will go
It’s not just the appearance of money and how we pay for goods that have changed – the value of the money in your pocket has too.
Over the last 70 years, the rate of inflation has differed. Inflation is currently higher than it has been in recent years, reaching 9% in April. Older generations will well remember inflation entering double digits in the 1970s.
Inflation means the cost of goods and services rises. Day-to-day, you may not notice how much costs are rising, while over 70 years it’s clear the effect inflation has.
Annually, between 1952 and 2021, inflation has averaged 5.1%. The BoE’s inflation calculator finds that if you had £1,000 when Queen Elizabeth II began her reign, you’d need more than £30,000 now to have the same spending power.
Money has changed hugely over the last 70 years, but what remains important is setting out your goals and getting the most out of your assets. If you’d like to talk about your financial plan, please contact us.