Not so long ago I received a text message…
It was from my 8 year-old niece.
Sadly for Phoebe, she’ll still have to concentrate at school – the coin was worth a couple of pounds. But it reminded me of something – why people collect coins.
They are real. They are tangible. They become parts of history.
But it all only makes sense if a coin has a proper face value.
I’ve been involved in the coin business for quarter of the century. And I love the next proof finish, limited edition coin just as much as the next new issue distributor – and indeed collector. The polished blank, the skilled craftsmanship of the minter, the miniature artistry of the designer. Even the odd 21st Century gimmick.
They have authority, value and collectability.
But new issue limited editions only make sense if we don’t forget their origin – an official, government authorised, legally enshrined token to use in exchange for goods and services. Or, as you and I might prefer to say, “money”.
1,100 years as custodians of our coinage
There’s one body in Britain that I always thought would be the very last to forget the real meaning of a coin. They boast over 1,100 years of history – right the way back to the time of Alfred the Great. The British Royal Mint.
But that seems to be just what has happened over the last few years. The Royal Mint appears to have forgotten what coins are all about. There’s a danger of turning our nation’s great coinage into mere trinkets.
Three fundamental things have gone wrong in the last few years.
1. Britain’s flagship coin is no longer available for face value.
The £5 Coin is the nation’s flagship commemorative coin. Introduced in 1990 as a direct replacement for the commemorative crown, it remained possible to buy these coins through banks and post offices (as well as the Royal Mint, The Westminster Collection and other distributors) in circulating quality right up 2009. Then there was a blip.
The Olympic £5 coins had to be treated differently because of the complexities of Olympic licensing rules but the Royal Mint did make them available to distributors and collectors in special brilliant uncirculated packs for face value. Then the 2011 Royal Wedding coin was apparently too late to be issued in circulating standard.
By 2012, the Royal Mint had totally stopped producing circulation quality £5 coins to distribute through banks and post offices but the Diamond Jubilee £5 coin was still available in brilliant uncirculated form for face value.
That is until May, when the Royal Mint withdrew it, leaving collectors with the option of a £13.00 cardboard pack as the lowest priced alternative.
The £5 coin has never returned since at face value.
But why? According to the Royal Mint they stopped distribution through banks and post offices because there was no demand from them. But is it as simple as that? In 2002 3.5 million £5 coins were issued for the Diamond Jubilee. Still in 2005, over 1 million £5 coins were issued. But the following year, numbers collapsed, not by a bit, but by 95% to just 52,000 coins. Surely a drop like that is not simply an overnight lack of demand from collectors.
And as to why the Mint stopped the brilliant uncirculated face value offer in 2012. I can only speculate but, as they say in America, “you can do the math”.
[Discover how you can be one of just 1,000 collectors who will have the opportunity to own the 2016 Queen’s 90th £5 for face value courtesy of Change Checker]
2. The introduction of silver commemorative face value coins
But apparently all was not lost for the face value collector, because as quickly as the £5 face value coin disappeared a new and exciting legal tender face value coin arrived. The Silver £20 coin.
First struck in the summer of 2013, this newly specified UK coin contained 1/2 oz of silver and featured Pistrucci’s St. George and the Dragon.
It was released with much fanfare and unheard of restrictions for collectors – limited numbers per household, UK only sales and online only reservations.
But the key thing was that this was a face value offer – a legal tender £20 for £20. Apparently you couldn’t go wrong.
In late December 2014, a £100 coin followed – it was a sensation. 50,000 pieces sold out in days. And last year a £50 coin for £50 joined the stable.
What could go wrong for collectors? These were beautiful coins, marking great British icons and huge national anniversaries. And you paid only their face value.
Except, it transpires, these coins are not quite what you might expect. They are “legal tender” but they are “not for circulation”. Apparently, you shouldn’t expect to be able to spend them and banks and post offices do not have to accept them either. In fact, according to a letter published by the Daily Mail, the Royal Mint has actually written to banks telling them NOT to accept these coins.
How can this be if they are legal tender?
Well there’s a loophole. In the UK there is a strict definition of “legal tender” and it’s not what you’d think. It doesn’t mean a coin has to be generally accepted. Apparently, according to the Royal Mint, “Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender.”
In fact if you want to get your money back on a precious metal face value coin, the Royal Mint says you have just 14 days to do so – their statutory obligation under Distance Selling regulations.
3. Delayed release of circulating commemorative coins
Luckily our normal coins, including commemorative £2, £1 and 50p coins, don’t have the same restrictions cast over them (although it is rather difficult to understand exactly how their status is any different in law).
In 2012 we saw the immense influence that an effective face value circulation coin programme has on coin collecting. 29 million Olympic sport 50ps went into circulation. Royal Mint figures estimated that 75% have been removed from circulation. It spawned thousands of new collectors – many of them children – and fueled a national interest in coins that I have not seen since every school child received a Silver Wedding Crown in 1977. It even started Change Checker!
But how would that have worked if the first time the Olympic 50p coins entered circulation had been December 2012? Four months after the Olympic flame had been extinguished. When Super Saturday was just a memory.
It simply wouldn’t have.
But that’s exactly what’s happening now with our commemorative circulation coins. The Royal Mint released the 2015 coins in Autumn 2014. You could own them all, alongside the definitive designs (total face value of £18.38), in a Brilliant Uncirculated Collector’s pack for £50.00.
In November the Royal Mint revealed the 2016 designs – once again available in a Brilliant Uncirculated Pack. This time for £55.00.
Yet none of the 2015 commemorative coins had even entered circulation. A year after their release; months after their anniversaries and after the new 2016 coins had been released.
And to add insult (well two insults) to injury, the last round pound will never even enter circulation and within weeks of the 2016 coin announcement, the Royal Mint has already added the Beatrix 50p to the year’s issues, making their own year-sets incomplete.
Our nation’s commemorative coins need to be vested in real coins. Legal tender must mean that you can spend it on the Clapham Omnibus – or at the very least pay it into a bank.
It’s that reality that has kept coin collecting alive for centuries.
It’s that reality that excited my niece, Phoebe, to send that text.
[Please click here to support our campaign to bring back the UK £5 coin for £5 by signing the petition at change.org]
Discover how you can be one of just 1,000 collectors able to own the new 2016 UK Queen’s 90th Birthday £5 for £5 courtesy of Change Change Checker.