[3] Versions of the pound sterling issued by Crown dependencies and other areas are regulated by their local governments and not by the Bank of England.

Paper currency issued by a wide range of provincial and town banking companies in England,[15][16][17] Wales,[18] Scotland[19] and Ireland[20] circulated freely as a means of payment.

In Gibraltar, there are examples of pairs of automatic cash dispensers placed together, one stocked with Bank of England notes, and the other with local ones.

[32] Modern Scottish banknotes are denominated in sterling, and have exactly the same value as Bank of England notes; they should not be confused with the former pound Scots, a separate currency which was abolished in 1707.

Although these banknotes are not legal tender in the UK, this does not mean that they are illegal under English law, and creditors and traders may accept them if they so choose.

The contemporary sterling is a fiat currency which is backed only by securities; in essence promissory notes from the Treasury that represent future income from the taxation of the population.

It tended to be times of war, which put inflationary pressure on the British economy, that led to greater note issue.

At the start of the First World War, the government issued £1 and 10/– Treasury notes to replace the sovereign and half-sovereign gold coins.

[43] Images of the revised notes featuring a new portrait of the King, as well as his personal cypher, were released by the Bank of England on 20 December 2022,[44] and entered circulation on 5 June 2024.

[46] The Bank of England has a set of criteria for choosing characters for banknotes – initially, it looks at who has previously featured, to allow for a reflection of the diversity of society.

It does not accept fictional characters, or any living people with the exception of the reigning monarch, but instead aims for individuals that are both widely admired, and are considered to have made an important contribution to British society and culture.

It is the first Bank of England banknote to feature two Britons on the reverse: James Watt (another Scotsman) and Matthew Boulton.

[76] The selection of Churchill to replace Elizabeth Fry raised some debate about the representation of women on British banknotes, with critics raising concerns that Bank of England notes would portray exclusively male figures, other than Elizabeth II who appears on every sterling coin and Bank of England note.

[80] In September 2013 the Bank of England opened a period of public consultation about the introduction of polymer, or plastic, banknotes, which would be introduced into circulation from 2016 if the proposals were supported.

The £5 note shows Nan Shepherd on the obverse accompanied by a quote from her 1977 book The Living Mountain, and the Cairngorms in the background.

The reverse displays two mackerel, with an excerpt from the poem An Roghainn (The Choice) by Scottish Gaelic poet Sorley MacLean.

[113] The obverse of the £10 note shows Mary Somerville, with a quote from her work 'The Connection of the Physical Sciences', and Burntisland beach in the background.

On the front of each note is a picture of Lord Ilay (1682–1761), the first governor of the bank, based on a portrait painted in 1744 by the Edinburgh artist Allan Ramsay.

The background graphic on both sides of the notes is a radial star design which is based on the ornate ceiling of the banking hall in the old headquarters building.

The £5 commemorative notes, issued to mark the 125th anniversary of the construction of the Forth Bridge, contain several new security features including a reflective graphic printed over a transparent "window" in the banknote.

The new notes each depict a different notable Scot on the front and on the reverse bear an illustration of one of Scotland's UNESCO World Heritage Sites.

[120] Banknotes of the earlier Famous Scots Series portray notable Scottish historical people along with items and locations associated with them.

Older notes bearing the Northern Bank name will continue in circulation for some time as they are gradually withdrawn, and remain acceptable forms of payment.

[citation needed] Ulster Bank notes all feature a vignette of three Northern Ireland views: the Mourne Mountains, the Queen Elizabeth Bridge and the Giant's Causeway.

In June 2018, Ulster Bank announced the introduction of a new series of polymer banknote designs, the first in the United Kingdom to have a vertical orientation.

The new series was designed around the theme "Living in Nature", highlighting Northern Ireland's botanical, zoological and geographical features.

[133] In August 2019, the design of the new twenty-pound note was revealed, with the idea of Northern Ireland as 'dwelling place', and images including Lough Neagh, the European eel and the Hawthorn flower.

[137] The obverse of the notes includes a portrait of Queen Elizabeth II based on a photograph by Mark Lawrence, alongside a view of an important Jersey landmark, with text in English.

The front of all Manx banknotes features images of Queen Elizabeth II (not wearing a crown: she was only Lord of Mann on the island) and the Triskeles (three legs emblem).

[140] The notes bear an image of the British monarch on the obverse and the wording "pounds sterling", meaning that more retailers in the UK will accept them.