Questions about the manufacture and circulation of polymer banknotes

We publish details of a selection of requests made under the Freedom of Information Act 2000, and the information we disclose in response.

Date: 7 November 2017

Disclosure:

  1. What is the purchase or manufacture cost to the Bank of England of the new £5 note, £10 note and £20 note?
    The Bank of England (the ‘Bank’) has printed 595 million polymer £5 banknotes, of which 248 million were in circulation at end-August 2017, at a cost of £46 million.   We expect to print 1,262 million polymer £10 banknotes by end-October 2017 at an estimated cost of £99 million. The quantity of £20 polymer banknotes to be printed has yet to be finalised but the number of paper £20 banknotes in circulation at end August 2017 was 2,229 million.
  2. The numbers of each expected to be issued in a year and the numbers of each actually issued in the most recent 12 month period. This information is published on our website. 
  3. The expected life of a banknote of each denomination.
    The average life is expected to be at least 5 years for polymer £5 and polymer £10 banknotes.   Reflecting its different pattern of usage, the average lifespan for polymer £20 banknotes could be in excess of 20 years.
  4. The recent consultation decision on the use of polymer in banknotes quoted a £16.5m differential over 10 years between tallow based and palm oil based, for the £5; £10 and £20 notes. Please provide the basis of this calculation.
    The additional cost of £16.5 million to change the composition of the polymer substrate to avoid the use of animal-derived additives in manufacture was based on estimates of additional costs provided by potential suppliers and forecasts of demand for £5, £10 and £20 banknotes over 10 years. For £20 banknotes, this includes production of the £20 polymer banknotes launch stock. As noted in the consultation response, the cost would represent a 5% rise in the annual cost of banknote printing. Furthermore as the contracts for the supply of the £20 polymer banknote are not yet finalised and a move to palm oil-derived additives could necessitate commencing a new tender, the total cost incurred as a result of moving to palm oil-derived additives could increase further through the process to finalise contracts[1]. This uncertainty was considered as part of the Bank’s decision.

[1] This response reflects the position as at 15 September 2017. The results of the tender for the production of the £20 banknote were announced on 5 October 2017.

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