The mystery of the disappearing banknote

Where have all the fivers gone? Glenda Cooper investigates
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The Independent Online
We seek it here, we seek it there. Shoppers, taxi drivers, bar staff seek it everywhere, but no one seems to know what has happened to the humble fiver.

Suddenly it seems in short supply. Remember the last time you had one in your hands? You do? How tatty was it? How many times recently have you been given change from pounds 10 in pounds 1 coins? What has become of all those blue-green notes?

The Bank of England insists that it is printing as many as ever, and there is no secret plot to phase them out. "In fact," says a spokesman, "336 million were issued at the beginning of this year compared with 308 million in 1995 and 325 million in 1994."

But that hardly tallies with the view on the street. Ray Green, a London taxicab driver, finds it harder and harder to get his hands on fivers. "It really bugs me. Whoever you pick up and even if the journey only costs pounds 3.50 they still always give you a tenner," he said last week. "I'm sure it's the banks' fault."

David Martin, another cabbie, said: "I always make sure I take a float of 30 to 40 pounds 5 notes when I start a shift. But it doesn't make any difference. By the end of the day I'm still out of change."

Rebecca Cottee, manager of a branch of Oddbins, the off-licence chain, shares the complaint: "We're never given fivers; it's always pounds 20s and pounds 10s, even if people are buying a pounds 4.99 bottle of wine."

So what is going on? Well, despite the slight increase in the number of fivers printed, there has been a fall in the number in circulation in recent years. In 1993 there were 1.16 billion pounds 5 notes washing around in the economy, according to the Bank of England, and now there are 1.07 billion.

But this is not a creeping abolition, the Bank says. "There are no plans to phase out the pounds 5 note. Our issue has been pretty consistent over the past four years."

Instead, it seems that we simply want more pounds 10 notes. Almost double the number of pounds 10 notes are being printed as pounds 5 notes; this year the figure for tenners will be 575 million. "The pounds 10 note is the most popular because it has a midway value," says the Bank spokesman. "The amount of pounds 50 notes issued is fairly low, and the number of pounds 20s ranks alongside the fiver."

This is probably to do with technology. This year 75 per cent of all cash withdrawals will be made through cashpoint machines. The sheer volume of transactions means that the clearing banks are much more keen to put higher denomination notes in the machine; it means fewer reloadings.

A spokesman for National Westminster said that a decision had been taken across the industry around three years ago to put in pounds 10 and pounds 20 notes into the machines rather than fivers: "It's in terms of volume. Fivers take up twice the space of tenners for the same amount of money. Usage has gone up so much we decided to do this."

"With the average withdrawal of pounds 50, it is difficult for banks or building societies to hold significant numbers of pounds 5 notes," said a spokesman from APACS, the UK payments industry body. He added: "Most machines will only hold two varieties of notes and so the pounds 5 is just not worth it. It's a movement of the times. The pounds 5 is probably worth less now than the pounds 1 note was when it was withdrawn."

But where are all those 1.07 billion fivers? If they are not in the cashpoints and not in our wallets and purses, what has become of them? It's still not clear. As to why the fivers we do see are so tatty, the Bank of England spokesman says: "The low denomination tends to get passed around more quickly so they get worn out. The printing process is exactly the same as the other notes; it's not that it's inferior. It's just the life that they have is much shorter."

The good news, however, is that when you get hold of a fiver it is unlikely to be a fake. Apparently it is not worth the counterfeiters' trouble.