New £1 coin: will it work in car park and vending machines?

The new £1 coin is just days away, and it might cause you a few headaches, warns Sarah Coles.

The new £1 coin launches at the end of March with a host of new security features making it harder to counterfeit.

Certainly, the Royal Mint - and coin collectors - have been getting very excited about the 12-sided coin.

David Gauke, Chief Secretary to the Treasury, announced: “28 March should be an important date in everybody's calendar this year as we will have a new quid on the block.”

Will it be a smooth transition?

He’s right, it’s an important date in the diary, but it’s not necessarily one to be looking forward to.

There will be some excitement about a brand new £1 coin, and arguably given that one in 30 of all £1 coins currently in circulation are reportedly fakes, there’s a very real need for change.

However, fake coins have never been an enormous issue for people.

We get them in our change in the same way as a real £1 coin, and spend them in the same way.

As long as we are completely unaware that the coins are fake, we’re not breaking the law.

We may have trouble using them in vending machines, but as long as we have a spare, we can save the troublesome £1 to spend in a shop.

Changing them, meanwhile, brings a huge amount of inconvenience to us all.

Put your pounds and pennies in a high-interest current account

Finding round pounds for years to come

If you talk to the Royal Mint, the argument is clear. There’s more than a six-month overlap between the introduction of the new £1 coin and the withdrawal of the old one, so you have until 15 October to spend them.

This will protect customers from being stuck with old coins. However, it’s not that simple.

Every household in the country will have to invest time and energy in digging out and getting rid of all the old £1 coins sitting in endless pockets and piggy banks.

Unless your coin collection is ruthlessly organised, there’s every chance you’ll be coming across old pound coins for months – or even years.

Meanwhile, even as you are ridding yourself of your old coins, shops will be allowed to give you round pounds in your change – so it’s a never-ending process.

If you are stuck with an old coin after 15 October, you will need to take it to the Post Office or a bank branch to change it – although banks will usually only accept coins from their own customers.

What about coin machines?

The nature of the £1 coin also throws up another issue: that of coin-operated machines.

Every day, millions of pounds worth of coins are fed into car park machines and vending machines. And while most of these will be upgraded to take the new £1 coin by 28 March, a significant number will still only accept the old one.

Coin-operated machines will cost significant sums to change, and not every firm can afford to do it overnight.

The Automatic Vending Association (AVA) says: “In 2011, the new 5p and 10p coins were introduced at a cost to the industry of £28.9 million and it is estimated that the upgrades required for the new £1 coin will cost approximately £32 million.”

This will either be borne by a vending machine operating company, or where a machine is client-operated, they will have to pay the conversion costs themselves.

There are also practical issues. Jonathan Hart, chief executive of the AVA, points out that vending engineers are working hard to complete the upgrades as fast as possible. He adds that they are prioritising machines used by the public – including those on retail sites.

However, he adds: “Alongside this task, they must also ensure they carry out their duties of regular machine maintenance. 

"As a result with an estimated 500,000 vending machines in operation across the UK, it will take several months to ensure that all of them are correctly upgraded for the new coin and this is simply not achievable before 28 March.”

As a result, the AVA estimates that 40% of vending machines won’t be ready for 28 March (200,000 of them). The British Parking Association has estimated that a quarter of Britain’s parking machines (around 80,000 of them) will not be ready either.

They are perfectly within their rights to take a bit longer. Guidance for businesses from The Royal Mint simply states that they should let customers know which coins they accept from the end of March, and that they only have to be ready to take the new coins from 16 October.

This may not cause many headaches in the first few days and weeks of the new coins. We’ll have plenty of round pounds left, and the shops will still be handing them out in change.

The Royal Mint highlights: “A gradual roll-out of the new £1 coin has always been planned, meaning that even if some machines are not ready for the launch date, there will be a co-circulation period of six months where both coins can be used.”  

Towards the end of the six months, however, the vast majority of round pounds will have been phased out of circulation, so if your parking meter doesn’t take the new coins, it leaves you with an enormous headache.

The Mint is clear that any inconvenience caused to the general public won’t be their fault. A spokesperson said: “The Government has taken a number of proactive steps to support businesses to manage the change, not least the long lead in to the introduction of the new coin had enabled businesses to plan resources ahead of the changeover.

“The Royal Mint has also been working collaboratively with key industries and businesses for several years to ensure a smooth transition.”

Just make it easy for us

For most of us, however, who to blame is irrelevant. As we console a crying seven-year-old who can’t get a chocolate bar after swimming, or flag down wary strangers in car parks in an effort to exchange new pounds for old, we’re not going to care whose fault it is.

We’re not going to be consoled that we’re doing our bit to clampdown on forgery, impressed by the swanky new design, or appreciative of Gauke’s hilarious ‘new quid on the block’ pun.

We’re just going to be left wondering why something that was sold to us as a breakthrough has to end up becoming such an inconvenience.

Put your pounds and pennies in a high-interest current account

More on the new £1 coin:

£1 coin that's worth £25. Do you have any?

Rare new £1 coin that costs nearly £2,000

New £1 coin: everything you need to know