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Are £5 Coins Legal Tender?

by Simon Barker

Are £5 Coins Legal Tender?

The £5 coin is legal tender, but is rarely seen in circulation. This is because the £5 coin is issued as a collectors item, usually as a commemoration of an event, and as such there are many different designs available.

You can try and pay with a £5 coin in a shop or bank, but you will find they are unlikely to accept it. This is because the term ‘legal tender’ does not obligate them to do so.

What is Legal Tender?

There is an ongoing pub argument as to whether Scottish money is legal tender in England. The problem is that the term ‘legal tender’ is misunderstood and – in fact – rarely used in legal terms. The answer to the Scottish argument is this: Scottish banknotes are legal currency throughout the UK; this is very different to legal tender. In fact, no bank note – not even those issued there – is legal tender in Scotland. Confused? Let us explain!

The term legal tender means that if you offer to pay off a debt in full in currency that is legal tender, they cannot then sue you for repayment. There are also certain restrictions on what value of smaller coins count as legal tender. The term does not apply to general daily use.

For example, should you choose to pay for a small value item in a shop with a £50 note, which is legal tender, the retailer has no obligation to take it. It’s up to them what currency they accept. The same applies to Scottish bank notes – while legal currency, no retailer is obliged to take them. So, we come back to the £5 coin: it is legal tender, but there is no obligation for a retailer to accept it in payment.

Further Complications about Legal Tender

So, we have established that the £5 coin is legal tender, yet, like other coinage and banknotes, this does not mean a retailer or a bank is obliged to accept it in payment. The status of notes and cons is as follows: in England and Wales, all Royal Mint coins and Bank of England notes are legal tender. In Scotland and Northern Ireland, only Royal Mint coins are legal tender – not banknotes of any kind.

When it comes to coins of smaller denominations, there are further complexities. For example, the 1p and 2p coin are only legal tender up to a value of 20p. Hence, if you pay for something at 40p in 1p coins, you are not using legal tender, which – legally – you should!

Once again, however, it is up to the retailer to decide whether they accept these legal limits. For the record, here are the legal tender limits for all UK coins:

  • 1p and 2p: up to 20 pence in total
  • 5p and 10p: any amount up to £5
  • 20p, 25p and 50p: any amount up to £10
  • All others: any amount.

You may be surprised to see the mention of the 25p coin there; this is the ‘Crown’ and they do still exist, albeit mainly in collector’s hands. Confusingly, the £5 coin is also referred to as a ‘Crown’ despite its greater value.

Before we move on, a point of interest: did you know that there are coins to the denomination of £20, £50 and £100? Once again, while these are legal tender, they are intended for collectors and are unlikely to be accepted in shops!

The Coinage Act and More

The laws regarding legal tender were set in stone with the introduction of the Coinage Act, in 1971. Effectively, this act legally precludes you from paying for anything that costs more than 20p with just 1p coins (although it’s doubtful anyone will adhere to the law) yet allows you to buy a £300,000 car or other item entirely with £1 coins, as they are legal tender up to any amount!

This is the major reason why legal tender should not concern us in everyday life; it is, in many ways, an archaic term designed to prevent people from paying for expensive items with small coinage, and also to ensure that debts are paid legally and without further recourse.

The £5 Coin and Designs

So, we have covered legal tender in some detail, what about the £5 coin itself? Introduced in 1990, the coin was intended as a replacement for the commemorative ‘Crown’ – the 25p coin mentioned earlier – and has appeared throughout the years with the Queen depicted on one side, and many other designs on the other. The first, in 1990, was introduced to celebrate the 90th Birthday of Her Majesty the Queen Mother; here are a few more notable commemorative £5 coin issues.

  • 1996 saw the Queen’s 70th birthday, and the issue of a £5 coin depicting Windsor Castle
  • Minted in 1999 is a £5 coin as a memorial to Diana, Princess of Wales
  • The Year 2000 Millennium Crown shows the dial of a clock set at 12 o’clock
  • 2002’s £5 coin celebrated the Queen’s Golden Jubilee

£5 coin windsor castle

£5 coin 1999 diana

£5 coin 2000 anno domini

£5 coin 2002 golden jubilee

These are just a few of the celebrations commemorated by the issue of a £5 Crown, with others including the death of Horatio Nelson, various Royal birthdays, and a set of several relating to the 2012 Olympic Games in London.

All editions of the £5 coin are collectable, but few reach values much beyond the face value. For the record, the 2014 edition marking the 300th anniversary of the death of Queen Anne is said to be the rarest and most sought after, with a value of in excess of £50.

The conclusion is that while the £5 note is legal tender, that means very little in terms of daily life, so you are best keeping your coins safe in your collection rather than trying to spend them in the local supermarket!

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