Where have all the fivers gone?

You may have noticed in recent months that the humble £5 is in short supply.

It may not seem like a particularly pressing issue but the lack of fivers in circulation at the moment is causing a headache for many people.

When it comes to banking, a £5 note can be particularly useful and shoppers in particular like them so that they are not carrying around too much change.

However, the Bank of England claims that it has a large surplus of the notes in storage but is having difficulty dishing them out to banks which prefer not to store them in their ATMs.

Bank of England governor Mervyn King revealed in a speech to City bosses that banks find it more economical to have £10 and £20 notes in their cash machines and this has led to the lifetime of an average £5 note doubling.

He described how many fivers are “noticeably soiled and scruffy” and revealed that he would be seeking urgent talks with banks over the issue.

“There is a need for an adequate supply of low denomination notes that can be used for small transactions where cash is the predominant means of payment,” he said.

“Such mutual convenience is a public good and may not correspond to the private interest of commercial banks.”

Mr King hinted that incentives may need to be put in place so that banks store more £5 notes in their cash machines.

Tags: Payment systems, urgent talks, Financial services, New York, lack, low denomination notes, fivers, private interest