The British Pound - Everything You Need to Know About The United Kingdom's Currency

Information on the British Pound denominations, exchange rates and currency transfers...
British
Pound – everything you need to know about the UK’s currency
If
you need to make currency transfers to or from the UK you’re going to need to
get to grips with the British Pound.
In
our handy guide we’ll tell you everything you need to know about the Pound, plus
some extra facts just for fun.
Pound
denominations
If
you’ve never handled Pounds before, here are the different denominations you’ll
come across.
Coins – 5 pence, 10 pence, 20 pence, 50 pence, 1 Pound, 2
Pounds
Notes – 5 Pounds, 10 Pounds, 20
Pounds, 50 Pounds, 100 Pounds
Fun(ish) fact... The British Pound is the oldest surviving
independent currency.
What a
difference a rate makes
Whenever
you transfer money abroad exchange rates will come into play.
If
you’re familiar with exchange rates skip this section, but if you’re new to the
wonderful world of currency here’s a quick explanation of what exchange rates
are and why you should care about them.
An
exchange rate is the value of one currency relative to another. So if you had
Euros but wanted Pounds, the EUR/GBP exchange rate would tell you how many Pounds
you’d get for each Euro.
Unfortunately
exchange rates are always moving, which means the value of the Pound to the
Euro varies over time.
Even
a seemingly small discrepancy in the exchange rate can make a big difference if
you’re buying Pounds, and the difference becomes more pronounced when you’re
transferring larger amounts.
For
example...
Currency pair |
Transfer amount |
Exchange rate |
Total |
EUR/GBP |
€250,000 |
0.88 |
£220,000 |
EUR/GBP |
€250,000 |
0.84 |
£210,000 |
|
|
Difference |
£10,000 |
As
you can see, securing the right exchange rate for your currency transfer is
key!
Fun(ish) fact... The
symbol £ is used to denote the British Pound. The symbol came from the Latin
alphabet ‘L’ which stands for Libra - the Latin for Pound.
Historic
Pound movement
Exchange
rates can move by as much as 5% in a matter of days during periods of
heightened volatility (political shifts, economic crises etc.) but if we look
back over 10 years you can see just how much rates can change.
EUR/GBP
In the last 10 years the EUR/GBP exchange rate has hit lows of 0.6941 and highs of 0.9427 – a difference of 24 pence - or £24,860 on a €100,000 transfer!
USD/GBP
The USD/GBP exchange rate, meanwhile, has traded at both 0.5827 and 0.8701 over the last decade – a movement of 28 pence.
Both
of these examples show that the Pound is weaker now than it was ten years ago,
meaning you’d get less GBP for your money now than you would have back then.
Fun(ish) fact... The English expression ‘spend a penny’
means going to the bathroom, and it originated from the need to pay one penny
for the use of a public WC.
What
causes Pound movement?
So
we’ve established that Pound exchange rates can move quite a bit. But what
causes them to move?
Different
things cause movement in different currencies, but there are several drivers
for GBP fluctuations.
Bank of England
(BoE)
The
Bank of England (BoE) is the UK’s central bank. The BoE’s interest rate
decisions can be the catalyst for GBP fluctuations if monetary policy is
adjusted. Even if policy is left unchanged, hints that it may be adjusted in
the future can be enough to trigger a shift in the Pound.
Political
developments
Political
developments can have a significant impact on the Pound. General elections,
political dramas and influential votes (most notably the EU referendum) have
all been the cause of GBP volatility.
Domestic data
releases
UK
data releases had a bigger impact on GBP movement before the Brexit vote, but
they can still inspire Pound movement. The most influential UK data includes
inflation, employment, retail sales, and services/manufacturing/construction
PMIs.
Pound
currency transfers
Our top tips
1.
It
pays to be aware of the fact that the exchange rates quoted online are often
the ‘interbank’ rate. This is the rate at which banks and financial
institutions buy currency and is not available to private individuals or
businesses, so it can be misleading.
2.
Look
into your options and explore different providers. While using your bank might
seem like the easiest option, currency specialists are likely to offer better
rates and more tailored support and services.
3.
The
currency market is always moving so it’s important to keep an eye on what
exchange rates are up to if you want to move your money at the right time.
4.
There
are lots of different currency transfer services available – keep reading to
find out all about them!
5.
Don’t
leave planning your currency transfer to the last minute. By giving yourself
time to look into all your options you could get more for your money.
GBP
currency transfer services
If
you need to transfer money to the UK there are a number of services you can use
to help you get more for your money.
Currency service |
What do you need to know? |
Spot contract |
Use a spot
contract when you need to move money ‘on the spot’. Transfers will be made at
the current exchange rate and will take between 24-48 hours depending on the
country and currencies involved. |
Forward
contract |
Fix an
exchange rate up to two years ahead of making a currency transfer. While fixing
the rate in this way would mean you’d miss out if the exchange rate
strengthened, you’d be protected from any negative shifts. |
Limit order |
Target a
stronger exchange rate. Set the rate you want to achieve and your transfer
will be triggered automatically if the market hits that level. |
Rate alert |
Set your
target rate and get notified by text or email if the market moves to that
level. |
Regular
payments |
Automate
regular overseas transfers. Remove all the hassle and benefit from excellent
exchange rates and no transfer fees. |
Currency
wallets |
Some
international payment specialists allow you to buy currency in advance and
keep it in a currency wallet until you need it. This allows you to take
advantage of favourable rates and can speed up future transfers. |
Pound
currency transfer FAQs
How long do
currency transfers to the UK take?
The
speed of your currency transfer will depend on the provider you use and the
countries/currencies involved. A EUR/GBP transfer should typically take between
24-48 hours, although it can be quicker if you have funds on account.
Is transferring
money to the UK safe?
As
long as you use a reputable provider your transfer should be safe and secure.
Look for a well-established currency provider who’s regulated by the right
bodies and has good online customer reviews.
How much do
currency transfers to the UK cost?
If
you use a bank to move money to the UK you may be charged a transfer fee. This
can be a flat rate or a percentage of the transfer amount.
Some
specialist transfer providers don’t charge anything outside of the exchange
rate they quote, and as they work on smaller margins than banks you’ll receive
a more competitive rate.
What is a
margin and how does it affect my exchange rate?
Banks
and other large financial institutions buy currency at the interbank exchange
rate and add on a ‘margin’ before selling it on to consumers. The larger the
margin applied the less competitive the exchange rate, and the less you’ll
receive.
How much can I
transfer to the UK?
Again
this depends on the provider you use, but many have no upper transfer limit
when it comes to moving money to the UK.
This information has been provided by
TorFX
If you need to move money to or from the UK our currency
partner TorFX can help.
TorFX have been offering their
customers great exchange rates, no transfer fees and personal account
management since 2004.
They’ve
won the Moneyfacts Consumer ‘International Money Transfer Provider of the Year’
award for six years running (2016 – 2021) and hold an ‘Excellent’ five-star
rating on Trustpilot.
Get
a quote now to find out how much you could save.
You can also create
an account with them in two minutes online or over the phone. Once
you’ve created an account you’ll be able to check live exchange rates 24/7 and
make fast, hassle free currency transfers.