Commitment to support the UK’s Wholesale Cash Distribution (WCD) network: View the update

Journey of a £20 note

Every day, millions of people draw cash out of an ATM without a second thought as to how the notes arrived in the machines, or what will happen to them after they disappear into the till at your local supermarket.

As the leading cash processor in the UK, Vaultex plays a key role in the note cycle, handling billions of notes each year, and maintaining efficient cash flow throughout Britain.

So what exactly is the life story of that crisp £20 note in your pocket? And, for that matter, the other three billion (or so) notes in circulation[1]?

It starts, of course, with printing. All notes are printed by just eight banks in the UK. Ulster Bank, First Trust Bank, Danske Bank and the Bank of Ireland print sterling notes in Northern Ireland, whilst Clydesdale, RBS and the Bank of Scotland print in Scotland. All English notes are produced by the Bank of England. For more information on what makes a note legal tender, take a look at this previous article.

And why are notes printed? Notes are mainly produced to replace those unfit for circulation, whether they are counterfeits, mutilated notes, or just too worn to continue in circulation. Now and again, a new design of banknote might be introduced, and of course, plans are in place for a switch to polymer notes over the next few years, after over 300 years of paper.

Special attention is paid during the production of the note to reduce the risk of counterfeits. Images are engraved by hand onto metal plates, or created using Computer Aided Design (CAD) systems and drawn onto film by a laser beam. Approximately 85 different inks are used to create the notes[2].

Once the £20 note is printed, the issuing bank will send it to a cash processing centre once an order has been placed. Cash management companies such as Vaultex place orders based on their forecasted demand and existing stocks, before the notes are transferred all over the UK via Cash-in-Transit (CIT) vans – armoured vehicles with multiple passengers to ensure high security is maintained.

All cash centres are owned by Note Circulation Scheme (NCS) members; organisations authorised by the Bank of England to process and distribute notes. Vaultex is one of four NCS members, operating 15 cash processing centres in England and Scotland.

It’s now time to send our note out to the British public. Every day, notes are sent out to retailers and ATMs from Vaultex and other NCS members. As a higher denomination, the standard distribution channel for a £20 is through an ATM. For £5, it is more likely to come as change from a till, whilst £50 notes are more likely to be received over a bank branch counter.

Once in circulation, the note may pass between several retailers or financial institutions before being returned to an NCS cash centre. When it is returned, it is sorted in order to make sure it is still fit for circulation – and not a forgery. All notes are fed through high speed note sorting machines, capable of sorting up to 2,000 notes per minute, and unfit notes are separated and verified.

The majority of notes are fit to be returned to retailers, but up to 15% will be deemed unfit in some way[3]. The usual lifetime of a paper note is about two years, although the new polymer notes are expected to last up to five years. Once a note is deemed unfit, it is sent back to the issuing bank for destruction. In the past, notes were incinerated, but currently, a more suitable alternative is to shred and compress the notes to form briquettes, which are then used to make compost in agriculture[4].

So there you go – what begins as a crisp, colourful, freshly printed banknote will spend most of its life either in a pocket – maybe for a brief time in yours – or in a cash centre, before an unglamorous ending as agricultural compost…

[1] Bank of England

[2] Bank of England

[3] Bank of England

[4] Bank of England