Our new banknotes: the journey from design to launch

By Raakhi Odedra and Stuart Cooper (Notes Directorate).^{footnote [1]}

• Our first polymer banknote series is now complete.
• We moved to polymer to make banknotes cleaner, safer and stronger. Early indications are that these objectives are being met already. In particular, because the new banknotes are much more difficult to copy, counterfeiting levels have already fallen significantly.
• Innovations in the manufacturing process have also helped to improve efficiency, reduce waste and reduce our carbon footprint.
• Despite changes in the way people shop, and the increased use of digital payments, cash remains an important payment option for many people. The Bank of England will continue to produce banknotes to meet demand from the public and has an ongoing research programme to support this.

Overview

The Bank of England is responsible for producing and issuing banknotes in England and Wales.^{footnote [2]} Our most recent series of Bank of England banknotes, technically known as Series G, was launched over a five-year period between 2016 and 2021.^{footnote [3]} This series is the first that we have printed on polymer.

This article provides historical background on the evolution of banknote design and security features and explains how our new banknotes are cleaner, safer and stronger. It also outlines the key stages of issuing the latest series, from design to launch, which is followed by the withdrawal of legal tender status of the old paper series banknotes.

Introduction: the rationale for a new banknote series

Banknote design through the ages

Money has a long and fascinating history. Early units of exchange included seashells, livestock, precious metals and commodities. Paper money was first introduced in China in the 7th century. In Europe, Sweden was the first country to issue banknotes in 1661 and the Bank of England started issuing banknotes that were 'payable to bearer' soon after it was established in 1694.

It was - and remains - our job to ensure banknotes are secure and that people can trust them as a means of payment. Since their initial introduction, our banknotes have changed significantly in terms of size, design and security features.^{footnote [4]}

You can see how the overall appearance of banknotes has evolved in Figure 2. Early banknotes were monochrome…they were also very large! For, example, the £50 issued in 1943 was more than twice the size of our latest £50 issued in 2021.^{footnote [5]}

Gradually banknotes have become more sophisticated, incorporating more colour, more complex designs and security technology. They also became smaller, to make them more convenient to use.

As you can see in Figure 2, early banknotes in the 18th century appear simple by today's standards, although they did incorporate the best security features available at that time.

Some of the early security features are quite intriguing. The Britannia designs used on notes from 1761 were very slightly different on each denomination, the idea being that these tiny variations in design would not be noticed by counterfeiters. They were of course known to Bank of England clerks who could use them to verify and accept the notes.

As printing techniques improved over time, the designs became more complex and harder to copy. This included the introduction of machine tools, known as lathes, to produce 'guilloche' patterns. An example of these patterns, from a development trial of the Series B banknotes in the 1950s, is shown in Figure 3. For a time, we employed skilled workers who operated the lathes to produce these complex images. With the advent of modern printing techniques, their value as a security feature has reduced, but they are still a feature of banknote design, being a part of the design aesthetic that the public easily recognise and trust.

One of the key security features recognisable to the public, rather than just bank clerks - and used right up until the last paper banknote series - was the watermark. Originally made by pouring cotton mulch over a copper mesh to make paper dry in alternating thicknesses, the technique has developed since, but the essence remains the same. Patterns show up through the paper when held to light, making it difficult for a counterfeiter to replicate.

Evolution of more sophisticated security features

Banknotes have always run the risk of being copied, but technological advancements in the latter half of the 20th century, which enabled the widespread introduction of colour photocopiers and desktop printers, meant that complex designs and watermarks were no longer enough to protect the currency against counterfeiting.

This spurred further waves of innovation and more sophisticated security features have been developed to stay ahead of new counterfeiting threats.

An example of this came in 1984 when new types of 'windowed' metallic thread were introduced as part of the design of Series D. While solid metallic threads had been used on our notes since 1940, this new design of thread appeared dashed until it was held up to the light. Importantly, if the note was photocopied, the thread would show as a solid line, which would clearly identify a copy. Further advances were made in Series E, when the foil patch, ultra-violet feature and micro-lettering were used for the first time on Bank of England banknotes.

Series G design and security features

In 2011, our banknote designers and scientists began work that, in collaboration with the manufacturers and relevant suppliers, would shape the design and features of the new banknote series.

The main aims for the new series were to make banknotes stronger and more secure, and for notes to also stay cleaner in circulation. The process of designing and trialling the first banknote in a new series - especially where substantial changes in the design or technology are involved - can take several years. The process involves scientific research on new materials and security features, incorporation of accessibility features, producing an overall design concept, and detailed engraving work. Only after this phase is completed does manufacturing trialling and full production begin.

The decision to switch to polymer

The decision to switch to polymer banknotes was the result of a comprehensive assessment of the durability and security of different materials by our scientific experts, as well as outreach with the banknote industry and the general public.

As part of our own assessments, new banknote materials were subjected to a range of chemical and physical tests to assess their durability; including being put through the Bank of England washing machine (they survived!). This demonstrated that the new polymer banknotes would be much stronger and more durable than the previous series. The polymer material itself is also inherently more secure, both in terms of the difficulty of printing on it in large volumes and the ability to incorporate large intricate windows that are more resilient to counterfeiting.

The inherent security of polymer has been evidenced by the international experience of the introduction of polymer in other countries. Chart 1 shows how counterfeiting levels in Canada fell significantly when it introduced polymer notes in the early 2010s and those levels have remained consistently low since. The additional durability of polymer banknotes was also apparent from other countries' experience.

As part of the early engagement on the design of the new series, we held focus groups with members of the public to help us test the handling and practical use of the new banknotes. We also held regional roadshows in shopping centres across the country to engage the public, and our polling showed that 87% were in favour of a switch to polymer banknotes. Overall, the switch to the use of polymer material was judged to support improvements in banknotes, including their durability, which would strengthen the public's confidence in the currency.

Selection and design of security features

The new series incorporates our most advanced security features, developed with our suppliers as part of our long-term banknote research programme.

Our scientists first assess how resilient different security features are to counterfeiting techniques. As well as being difficult to replicate, security features must also be easy to use and intuitive. As part of the research for the new banknote series, we ran psychological perception studies to ensure that the new security features being considered were easy to recognise and check .

Based on this research and development, we have incorporated a number of security features that are common across all the denominations in our new polymer series to make checking easier. In addition to the inherent security of polymer material (as described above) and the use of an ultraviolet (UV) feature and micro-lettering as used on our paper notes, the notes have a foil applied that contains a number of different security features. These include a hologram that changes from one image to another when tilted from side to side and a silver foil patch that contains a 3D image of the coronation crown. It also includes highly detailed metallic images over the see-through window, which are different in colour when seen from the front and back of the note. In addition - taking advantage of the see-through windows which are possible to incorporate in polymer notes - there is a finely detailed image of Her Majesty Queen Elizabeth II in the window; analogous to the watermark image on paper notes.

You can take a closer look at a number of the key security and design features used in our new £50 in Figure 4.

Accessibility

Banknotes must be practical for everyone to use. So our banknotes are designed to include features to help visually impaired people identify and use the notes. Printed features, such as large numerals, high contrast and strong colours are important for partially sighted people. Differential note sizes are also a helpful design feature for people with no vision. As part of the research for the polymer series, we worked with the Royal National Institute of Blind People (RNIB) to consider the development of additional features to aid accessibility. Based on this collaboration, this is our first series to include an embossed tactile feature, which is made from a series of clusters of four raised dots positioned on the left-side edge of the banknote. The number of clusters varies on each denomination to enable blind and partially sighted users to differentiate each denomination value.^{footnote [6]} The incorporation of this tactile feature was only made possible due to the use of the new polymer material. Due to its plasticity, polymer is much more able than paper to keep the shape of this feature.

Design

The introduction of each new banknote series brings an opportunity to develop new exciting designs that will appeal to the public. However, for ease of making payments, people also need to be able to easily recognise and check their banknotes.

So it can be helpful to keep some elements of continuity in design to keep the currency recognisable, and to support public acceptance. Keeping some familiarity in design has been particularly important when making the transition from paper to polymer banknotes. Key design features that have been carried over from previous banknote designs into the polymer series include the Bank of England font and an unchanged portrait of Her Majesty Queen Elizabeth II on the front of the banknotes. The front of the banknotes are very similar across all denominations. This is also important because it makes the series recognisable as a set.

As part of the Bank of England banknote design, the character that appears on the back of the banknote is the main way that each individual denomination is differentiated. We provide background on the character selection process in Box A.

In addition to being easy to recognise, and easy to use, the finished design must also be possible to produce in large volumes of banknotes to a high-quality standard.

Working to these principles, our banknote designers were responsible for creating a design concept for each banknote in the new series. Concept designs provide an early sketch of how the character and design elements would be set on the finished banknote. When creating this design concept, our designers consider images, style, text, size and colour.

Once the concept is agreed, the next stage of the design process is to integrate the security features within the design. These need to be brought together in a way that is both aesthetically pleasing and practical. The concept image is then translated into a detailed design, using fine lines, dashes and patterns to depict the portrait and supporting images, all portrayed in the main denomination colour for each banknote. When you look closely at our latest banknote series, you will see much more than the character and security features. The visual design incorporates many images inspired by the character's achievements and work. For example, the design of the new £50 featuring the scientist and mathematician Alan Turing, incorporates the Automatic Computing Engine Pilot machine, mathematical formulae, and binary code, as well as his portrait.

Engraving for printing plates

The more detailed design process for a banknote needs the expertise of specialist graphics technicians, using various printing techniques. Traditionally, engravers would create portraits and other elements of the banknote design by hand. They engraved the images onto metal plates which would then be reproduced as printing plates for the intaglio process (Figure 6). Today, much of the design work is done using specialist computer-aided design and this software also helps to make the industrial production tools, including printing plates. However, despite all the advances in technology, the engraved images needed for part of the printing process have to be produced first by hand at a scale five times larger than the finished note size in order to incorporate the fine detail required for mass production.

Production

As well as needing to withstand day-to-day use by the public, retailers and processing at cash centres, we also need to be sure that a banknote's design and security features can be mass-produced.

For the polymer series as a whole, at the time of writing we had printed almost six billion banknotes, all produced to exacting standards, including specifications on size and quality of each key component. The move to polymer and addition of more sophisticated security features meant that the production process was also more complex. Up to one and a half years of pre-production trials were required for each new banknote to optimise the previously agreed design for the manufacturing equipment and industrial scale production. Throughout this stage, our technical experts, the printer, and the suppliers of polymer and security features had to work together closely.

Another innovation for the polymer series was the procurement and supply-chain strategy for the polymer substrate itself. When we started production work on our new series in 2014, we used a single supplier of polymer material for banknotes, CCL Secure,^{footnote [8]} which provided the material for the £5 and £10 banknotes. However, from the introduction of the new £20 and £50 banknotes, the material for all banknotes has been sourced from two suppliers, CCL Secure and De La Rue. This dual supply strategy supports ongoing price competition, removes the risk that the supply of polymer material is dependent on a single source, and has also allowed us to work with both suppliers to deliver other efficiency and environmental benefits, such as a reduction in the carbon footprint of the polymer material. Initially, CCL Secure produced the polymer in Australia but committed to build a new UK manufacturing plant in Wigton, Cumbria. The way the polymer film is made at this new site is remarkable to see, as it is formed by creating an enormous bubble (Figure 5). De La Rue uses a different production method to manufacture polymer film to our specifications.

As well as being confident that we can print billions of banknotes, we have to ensure the banknotes can be used in the economy. Before we start mass production, we need to know that ATMs can dispense banknotes, ticketing machines can accept the banknotes for train fares and self-service checkouts will take the banknotes as payment for groceries. And these are just some of the machines that accept, dispense, count and authenticate banknotes, all of which must be updated successfully. To achieve this, we distribute sample polymer banknotes to key manufacturers of cash processing equipment for them to test in their machines to ensure they can be accepted and processed correctly.

Once every aspect of the banknote has been finalised, mass production can finally begin. The typical running speed of machines is around 10,000 sheets of banknotes per hour. The number of banknotes on the sheet depends on which denomination it is, given that each is a different size, but for the £20 denomination it means around 450,000 notes can be printed per hour.

The final stage of production is quality control for the finished banknotes. Historically, this involved many staff working together to carefully inspect sheets of banknotes. Nowadays, each note is passed at high speed - about 40 notes per second - through an automated inspection process that performs multiple checks for defects. Defective banknotes are automatically identified and destroyed, whereas banknotes that meet our quality standards are packaged up, ready for issue. In practice, at this stage very few banknotes are found to contain errors because quality control takes place throughout the production process.

Distribution

Once they are printed, the banknotes then have to be distributed around the country. We do not distribute them ourselves, instead the four members of the Note Circulation Scheme - G4S Cash Solutions, National Westminster Bank, Post Office and Vaultex UK - buy the new banknotes from us and then supply them to customers from a number of cash centres located around the UK (Figure 7).

When we issue a new banknote series, we also need to take the old series out of circulation. The older notes - in this case the final paper banknotes - are more at risk of counterfeiting. Also, it is inefficient for businesses if their machines and staff have to validate and process both the old and new banknotes. For the polymer series, we did not allow any paper banknotes to go back into circulation after the new polymer banknote for that denomination was issued. This means that old paper banknotes are gradually removed from circulation at the point when they are used in transactions or deposited.

However, because some banknotes are held as a store of value, particularly the £20 and £50, we set a date after which we withdraw legal tender status for each banknote that has been replaced. This encourages the general public to spend, deposit or exchange their old banknotes ahead of the deadline. The paper £5 and £10 banknotes were withdrawn in 2017 and 2018 respectively, while the last day to use the paper £20 and £50 notes is 30 September 2022.^{footnote [9]}

At the end of their life, all banknotes are returned to the Bank of England for destruction. Paper banknotes either undergo composting treatment to create a soil improver or are processed at a local energy recovery facility to generate electricity. Of course, we also needed to have a sustainable approach in place for polymer banknotes before their introduction. We commissioned an independent third party to conduct a lifecycle study assessing the environmental impacts of different waste treatment options for polymer. Recycling was the most favourable option. Unfit polymer banknotes are shredded and then turned into pellets before being transformed into new plastic items, such as plant pots and storage boxes.

Communication and engagement

Public confidence in banknotes is underpinned by people being able to easily recognise each denomination and having trust in their security features. Communication and engagement was therefore an important part of the successful launch of our new banknote series. We needed to raise awareness of the new designs with the public, and also engage with the cash industry and retailers to ensure they were prepared for the change.

Raising public awareness

There were three main stages of our public communications campaign for each new banknote - the character selection/announcement, unveil of the design, and issue (which is the day when the banknote first becomes available to the public).

A successful communication campaign was particularly important for the launch of our first banknote in the new series, given the significant change as we shifted from paper to polymer. Supported by coverage across TV channels and newspapers, 87% of the public were aware of the new banknotes when the first new £5 banknotes were issued in September 2016.

Our approach to generating public awareness has evolved significantly since the launch of the £5. Since then, the popularity of social media has grown and become an increasingly important part of our communications (Figure 8). Our social media posts have been viewed millions of times, generating tens of thousands of likes, shares and comments.

We also targeted a wide range of groups in society, in particular heavy cash users, by partnering with charities, using a range of publications, as well as sharing posters that retailers can display near tillpoints and in bank branches. As a result, there has been a very high level of public awareness generated for all of our new banknotes. Similar communication campaigns are used to ensure that people know when old banknotes will cease to be legal tender and how they can exchange them before and after that date.

Industry and retailer engagement

In addition to the general public, we also engage with the cash industry, retailers and consumer-facing businesses. Engagement with industry sectors that use or process notes was crucial for a successful transition to the new series. Because of the switch to polymer notes, we implemented a more comprehensive engagement strategy than for any previous banknote series. There were four key aspects to this industry engagement.

1. Wholesale distribution - working with the Note Circulation Scheme members, major financial institutions and other ATM operators to ensure that the cash industry was ready to distribute the billions of notes required at or shortly after the launch date of each note.
2. Theft deterrence - working with relevant companies to ensure sufficient solutions were available to deter or prevent theft of large amounts of polymer (rather than paper) banknotes, for example from ATMs and cash transport vehicles.
3. Staff training - helping retailers and other businesses to train their staff to be ready to manually check the new banknotes. This included getting industry input to the various training materials we provide free of charge.
4. Machine updates - the most challenging logistical undertaking in terms of the number of companies involved was to make sure that the hundreds of thousands of machines that accept, dispense, count and authenticate notes were ready for each new banknote as it was issued. A particular emphasis was put on machines that are used by the public or in transactions with the public.

We also worked with Scottish and Northern Ireland issuers to understand and identify synergies with their plans for issuing their own polymer banknotes and withdrawing old paper banknotes.

Initial impact of the banknote series change

The improvements made in our latest banknote series aimed to make banknotes cleaner, safer and stronger. Since the recent completion of the launch of the new series, the initial indications are that these objectives are being met.

Cleaner

Prior to the introduction of the new banknote series, research showed that polymer is more resistant to dirt and moisture. An in-depth life-cycle analysis also considered a range of environmental factors, including carbon footprint. This showed that polymer banknotes are more environmentally friendly than paper notes because they last longer and can be recycled into new plastic items.^{footnote [10]}

In 2017, the Carbon Trust certified that the carbon footprint of a £5 polymer banknote was 16% lower than that of a paper £5 note, and for the £10, it was 8% lower. We have continued to reduce the carbon footprint of our polymer banknotes through the procurement process. Our most recent tender processes have secured carbon neutrality for future contracted supply of polymer substrate. This will be achieved by our suppliers through both carbon reduction initiatives and the purchase of offsets. Additionally, we have switched to the use of renewable electricity at all our premises, including the print works.

In this year's climate-related financial disclosure, we have also committed, for the first time, to reduce emissions from our physical operations so they will be consistent with net-zero emissions by 2050 at the latest.^{footnote [11]}

Safer

Initial evidence is that counterfeiting levels have fallen when denominations have moved to polymer. While counterfeiting of £5 banknotes was very low even before the move to polymer, a clear drop in the level of £10 counterfeiting can be seen following the introduction of the new polymer banknote in 2017.

There has also been a fall in £20 counterfeits since its issuance on polymer in February 2020. While much of the 60% fall in counterfeiting volumes and values in 2020 can be attributed to the impact of Covid lockdown restrictions, which led to a decline in high street spending and cash transactions, the reduction in counterfeits was much larger than the equivalent fall in cash payments (around 35% by volume).^{footnote [12]} As lockdown measures eased, the detection of counterfeit notes increased initially, but has now fallen back substantially. We also know that at end-August 2021 the counterfeits returned to Note Circulation Scheme cash centres were 84% lower by volume than the maximum level seen in 2019. This indicates that more secure polymer notes are now having a material impact. There have also been significant police actions in recent years to combat the organised criminal gangs involved in counterfeiting.

To date, a relatively small number of counterfeits of the polymer £10 and £20 have been seen, using a clear plastic material, but these can be easily identified by checking key security features such as the hologram image change. However, some counterfeiters are still managing to pass very crude copies that are on paper without any attempt to copy security features, showing how important it is that businesses check banknotes and stay up to date with best practice. Information on how to check banknotes can be found on our website.

Stronger

Banknotes wear out over time and need to be replaced. We know, for example, that paper £5 notes quickly became worn during their everyday use, and on average lasted just 22 months. Polymer banknotes are less prone to wear and tear, and this increases their lifespan. Ahead of their introduction, we expected polymer notes to last at least 2.5 times longer than their paper equivalents.

It is still too early to say how long the new polymer notes will last, as they have not been issued for long enough to provide full life-cycle data. But early evidence from the £5 note suggests they are exceeding this expectation.

Public confidence in banknotes

Overall, the public has a high level of confidence in banknotes, and the move to polymer has supported that. Our recent polling of our Citizens' Panel members indicates that they have noticed benefits from the series change.^{footnote [13]} Seventy-seven per cent of respondents reported an overall improvement in the new series, compared to the old paper banknotes (Chart 3). Some of this perceived improvement will be due to the improved condition of banknotes as well as their increased durability. The majority of respondents agree that the new banknotes are longer lasting and are harder to damage (Chart 4).

Bank of England banknotes are easy to recognise and that they are a good size. While some members of the public comment that the smoother texture of the new banknotes can affect their handling, overall our recent polling indicates that the majority find them to be functional, practical and easy to handle.

Conclusion: completion of the polymer series and the future of banknotes

Our new banknote series is now complete. We set out to create cleaner, safer and stronger banknotes, and our experience so far indicates these objectives are being met.

The launch of the new series has also seen significant steps forward in innovation and efficiency, as well as new ways of engaging the public during the design process. The success of the launch was built on contributions from experts in the fields of engineering, science, design, counterfeit analysis, contract management, quality control and communications.

The final step of the series change will be the withdrawal of legal tender status of paper £20s and £50s on 30 September 2022. This will be the last day that paper Bank of England banknotes will be used in transactions in the UK after more than three hundred years.

As we look forward, the payment landscape will see further change. Consumers have more choice when it comes to making payments and managing their savings. For payments, they commonly use cash, cards, mobile phones, or a combination of all three.

As payment preferences continue to evolve, the transactional use of cash is likely to continue to decline. But cash remains an important payments option for many people, in particular for certain groups in society including among older age groups and those on lower incomes. It fulfils all the important fundamentals of a currency and is trusted. It is easy to use, useful for budgeting, widely accepted and can also be an important contingency for other payment types. In 2020, in a year where consumer spending was heavily impacted by Covid, 6.1 billion payments in the UK were still made using cash, accounting for 17% of all transactions. Many people also use cash as a store of value alongside other forms of savings.

So it is important that we continue to fulfil our responsibilities to ensure that genuine, good quality banknotes are available to meet public demand. We have not yet decided when we will issue the next series of notes, but given the lead times involved, our banknote designers and scientists are already thinking about the possible banknotes of the future. We maintain a continuous research and development programme to assess new security technologies as they emerge, to ensure that we stay ahead of new counterfeiting threats and the increasing capability of digital reproduction technology.

We are also working closely with HM Treasury, the Payments Systems Regulator and the Financial Conduct Authority, as part of the Joint Authorities Cash Strategy Group, to ensure the UK's cash infrastructure remains resilient, cost effective, sustainable, and can meet the needs of users.

As set out in this article, banknotes have changed significantly over time in terms of their look, feel and the use of increasingly sophisticated security features. Future generations of banknotes and other payment options will evolve to reflect their changing use in society. The Bank of England's role remains central in ensuring public confidence in both banknotes and in the currency more broadly.

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