Spare change rules

Did you know?

There are rules on how much spare change you can use in one transaction under the Coinage Act 1971. This prevents people paying for goods entirely in pennies, that would take hours to count.

It is estimated that on average every household has at least 50 sitting around in change, whether in pockets, penny jars, or down the back of the sofa.

By spending spare change when you can or building up a decent amount to hand over to your bank, you can make the most of the money you would not normally use.

Shops can refuse to accept your payment if the rules below are not followed:

  • You can only pay for 20p worth of goods with pennies or tuppences

  • You can only pay for 5 worth of goods with 5ps or 10ps

  • You can only pay for 10 worth of goods with 20ps or 50ps

  • 1 and 2 coins can be used for any amount

So what are the most economical and hassle free ways of getting rid of your hoard of coins?

Take it to your bank

Using your bank's coin machine

Some banks now have coin machines that let you pay in your spare change without needing to sort it first.

Not all banks offer these machines, and even those that do might not have one in your local branch. However, they should be able to take your coins if you sort them yourself.

At the counter

Taking your spare change to the bank to be sorted and applied to your current or savings account balance is one of the most cost-efficient ways to cash in your pennies.

Warning:

Your bank teller will not look kindly on you if you bring in bags of unsorted change and in many branches they will not be able to sort it for you.

Just ask for money bags at the counter, sort the change at home yourself and put the coins in their corresponding bags. In each bag, you will have to collect:

  • 1 in coppers

  • 5 in 5p and 10p coins

  • 10 in 20p and 50p coins

  • 20 in 1 and 2 coins

Take these into the bank and the teller will be able to weigh them to check you have the right number of coins, then credit them to your account.

This is the most cost-effective method because it means every penny goes straight to your account. However it does require patience to build up the required amount of change and sort it correctly yourself.

Bear in mind that some banks will limit the number of bags of coins you are allowed to take in per day, or may refuse to take them altogether at busy times. It is also worth noting that most banks only take change from their own customers.

Use a Coinstar machine

Important:

Coinstar machines are the latest way to cash in your change, but make sure you are happy to pay a fee for a machine to sort your coins for you.

You can find Coinstar machines in most supermarkets, and they work by automatically sorting your change and converting it either into a voucher for cash that you can exchange at the customer services counter, or a voucher for money off your shopping.

However, the sting in the tail is the cost of convenience - Coinstar machines charge a fee of 10.9%. That means for every 1 you feed in, 10.9p will be taken off.

This may be a price you are happy to pay for the ease of having your coins sorted automatically but it is something to consider before you cash in your change.

Keep a penny jar

Solution

If you want to be extra-organised, designate different penny jars for different kinds of change, so that when it comes to sorting it into money bags and taking it to the bank, half the work is already done.

Rather than letting spare change wander freely around your house, in trouser pockets, at the bottom of your handbag, and so on it really is worth collecting it in a penny jar.

Also it is a good idea every now and then to drop a 1 or 2 coin into your penny jar to boost the balance.

However, it is worth noting that money kept in penny jars for years can in fact begin losing value, if it does not keep up with inflation.

Therefore, you should remember to cash it in regularly so that you earn interest on your cash and get a little extra back.

Spend it when you can

Another way you can put your change to good use is to spend it on small transactions. This is particularly applicable to 5ps and 10ps - although they will often get lost at the bottom of your wallet, it is worth using them to pay for purchases when you can.

However, the Coinage Act limits how many small coins you can use in a transaction, although shops are able to choose to accept larger volumes of coins if they want to.

Give your coins to charity

Instead of putting smaller coins in your wallet at a checkout, you could give your spare change to charity instead. Many checkouts have charity tins, or you could save the coins for a specific charity you wish to support.

Practical Action has a freepost address where you can send your spare coins, and they can accept foreign currencies too - even obsolete ones!