Decimalisation in the UK: When, Why and How?

There were economic, political, and practical reasons behind the shift:

1. Simplicity:
   The £sd system was difficult for everyday use and international trade. Decimalisation made calculations faster and easier.
2. Modernisation:
   By the mid-20th century, most major economies had already adopted decimal systems. Britain’s currency appeared outdated and inefficient. The move also reflected wider monetary reforms across government and banking. The Bank of England’s guide to Decimalisation provides further detail on the financial reasoning behind the change and how it shaped Britain’s modern currency system.
3. Technology and efficiency:
   The rise of computers, cash registers and accounting machines required standardised decimal systems.
4. European alignment:
   The UK’s ambition to join the European Common Market (later the EU) encouraged compatibility with European trade practices.

For more on how government and financial systems evolve alongside currency policy, read What Is the UK Monetary Supply?.

Although Decimal Day arrived in 1971, the idea was centuries in the making:

• 1824: Sir John Wrottesley first proposed a decimal currency in Parliament – suggesting 1,000 farthings to a pound.
• 1840: The Decimal Association was founded, campaigning for decimal and metric reform.
• 1849: The florin (two shillings) was introduced, valued at one-tenth of a pound – a deliberate step towards decimalisation.
• 1963: The Halsbury Committee laid the groundwork for modern change.
• 1969: The Decimal Currency Act finalised the legal framework.
• 1971: Decimal Day arrived under Sir Edward Heath’s government, following planning initiated by Harold Wilson’s Labour administration.

Meanwhile, South Africa had already adopted a decimal system in 1961 when it introduced the Rand, and launched the Krugerrand gold coin in 1967 – showing how gold-backed and decimal currencies could coexist. (Learn more about gold’s enduring role as both asset and money in Is Gold a Commodity or Currency?)

The UK government spent over £1 million on public education and advertising. Shops, banks, and post offices displayed posters and jingles – including the well-known “Decimalisation Song” by Max Bygraves.

Banks closed for five days (10–15 February) to prepare, reopening on ‘D Day’ with the new money.
Despite initial confusion, especially among older consumers, Britain adapted remarkably quickly.

The Royal Mint played a central role in designing and producing the new coinage ahead of the switch. You can read more about the process and see images of the original coins on The Royal Mint’s Story of Decimalisation

The decimal half-penny (½p) was the smallest UK coin but proved unpopular and was withdrawn in 1984. The £1 coin (1983) and £2 coin (1998) came later, reflecting further evolution.

For more on the coinage’s link to gold and value systems, visit our guide to Gold vs Paper Money.

The Crown, worth five shillings (or a quarter of a pound), was traditionally a large silver coin used for ceremonial occasions rather than everyday transactions. It was later issued mainly as a commemorative piece, a practice that continues today with modern £5 coins.

The Pound, often called the Sovereign when minted in gold, became the core unit of British currency. Gold Sovereigns remain highly valued by collectors and investors, linking directly to Britain’s era under the Gold Standard.

The Guinea, valued at 21 shillings (£1.05), was originally made of gold and used from the 17th to early 19th centuries. Although it ceased to circulate after 1816, the term “Guinea” lived on as a symbol of prestige and luxury pricing—for example, fine art, thoroughbred horses, and bespoke tailoring were traditionally priced in Guineas to signify status and quality.

Ireland adopted decimalisation on the same day as the UK – 15 February 1971. The Irish Pound (or Punt, IR£) mirrored the British system until replaced by the Euro in 1999, with coins entering circulation in 2002.

Britain was surprisingly late to decimalise. Other nations did so long before:

• Russia (1704) – Introduced the Rouble, divided into 100 kopeks, becoming the world’s first decimal currency.
• France (1795) – Adopted the Franc, replacing the livre tournois, as part of revolutionary reforms introducing the metric system.
• USA (1792) – Established the Dollar, divided into 100 cents, under the Coinage Act, becoming the first decimal system in the modern Western world.
• Netherlands (1817) – Adopted the Guilder, subdivided into 100 cents, as part of economic reforms following the Napoleonic era.
• Sweden (1855) – Introduced the Riksdaler, divided into 100 öre, replacing the older system of marks and skillings.
• Austria-Hungary (1857) – Implemented the Gulden (florin), divided into 100 kreuzer, as part of the Vienna Monetary Treaty aligning with neighbouring European systems.
• Spain (1868) – Adopted the Peseta, divided into 100 céntimos, replacing the real following Spain’s alignment with the Latin Monetary Union.

By 1971, Mauritania and Madagascar were the only countries still using non-decimal currencies – a fact that remains true today.

Many feared price inflation and loss of value, but decimalisation ultimately simplified trade and daily life. Britain’s financial system became more efficient and globally aligned.

For investors and collectors, this period represents a fascinating divide between pre-decimal and post-decimal coins – many of which are prized today for their gold and silver content.

The transition was widely documented in schools, media, and government materials. For a fascinating look at the posters, jingles and teaching aids used to educate the public, see The National Archives’ Decimalisation Educational Resources.

To understand the wider evolution from tangible metal value to fiat currency, explore:

• What is the UK Monetary Supply?
• Is Gold a Commodity or Currency?

For collectors and precious metals enthusiasts, decimalisation marks a defining era in British coinage. It bridged the gap between historic pre-decimal coins, featuring monarchs such as Queen Victoria and George VI, and modern decimal issues, such as the early coins of Queen Elizabeth II.

Many pre-decimal coins – especially those struck in gold or silver – are now highly sought after. Collectors value them for their craftsmanship, rarity, and historical importance.

If you own older coins, check their metal content:

• Coins minted before 1947 contain 92.5% sterling silver.
• Coins from 1920–1946 contain 50% silver.

Our in-depth analysis of silver fineness covers the entire spectrum of purities.

• Decimalisation took effect on 15 February 1971 (“Decimal Day”).
• The UK shifted from £sd (pounds, shillings, pence) to a base-10 currency of 100 new pence per pound.
• The process took decades, dating back to the 1840 Decimal Association and the 1849 florin.
• Driven by modernisation, European integration, and technology, decimalisation simplified trade and accounting.
• It laid the foundation for Britain’s modern monetary system.

When did Decimalisation happen in the UK?

Decimalisation took place on 15 February 1971, known as Decimal Day, when the UK switched from pounds, shillings and pence to a system of 100 new pence per pound.

Why did the UK change to decimal currency?

To simplify transactions, modernise its economy, and align with international trade and technology standards.

What was the old British money system?

Before decimalisation, £1 = 20 shillings, and 1 shilling = 12 pence – meaning 240 pence to the pound.

Which pre-decimal coins are most valuable?

Coins minted before 1947 often contain high silver content and are prized by collectors, especially those featuring Queen Victoria, George V, or George VI.

How is gold linked to Britain’s monetary history?

Gold once underpinned Britain’s money through the Gold Standard, but the UK now operates a fiat system, discussed further in Gold vs Paper Money.