Financial News

  • 18 December 2012, 13:16

Bank Eyes Plastic Money To Replace Notes

The Bank of England has made contingency plans for a changeover to plastic bank notes, Sky News has confirmed.

Tender documents for a new contract to print money have included a clause allowing for the polymer-based currency.

A source has told Sky News the printing proviso is to "future proof" the bank's supply of money.

A number of countries already use plastic money, which can be more durable than traditional cotton-based paper notes.

Australia, Romania, Vietnam, Mexico and Malaysia are among those to have introduced polymer money.

The Australian $5 note lasts an average of 40 months whereas an English 5 note is worn out after an estimated six months.

Between 2003 and 2011 the Bank of England received claims for bank notes destroyed through washing totalling 747,000, and 8.625m for fire or flood damage money.

It also received claims for 946,000 for notes that had been eaten or chewed.

Claims for notes deemed to be "contaminated" topped 232m in the period, with the total figure for all damaged or mutilated money reaching 263m.

In addition to greater durability the plastic money can incorporate holograms and other security devices to thwart counterfeiters.

"The Bank of England is not doing its job properly if it does not take account any new security measures it can utilise to protect the currency," the source said.

The new printing contract will run from 2015 to 2025 or 2028.

The bank plans for a consultation period of at least 12 months ahead of any changeover, as cash and vending machines need mechanisms recalibrated.

A Bank of England spokesperson told Sky News: "It's incumbent on the Bank, within our general research and development program to look at the pros and cons of various security features and substrates.

"No decision has been made as yet regarding printing on polymer."

Advertisement