What Is London Money Called, and how does it work? This is a common question for travelers and those interested in international finance. At money-central.com, we provide clear, up-to-date information about the British Pound, including its usage, exchange rates, and tips for managing your money in London. Learn about currency exchange, using cards, and other financial aspects of visiting or living in London, ensuring you are financially savvy and prepared.
1. What is the Official Currency of London?
The official currency of London is the British Pound Sterling (£), often simply called the Pound. One Pound is divided into 100 pence (p). The British Pound is not only used in London but throughout the United Kingdom.
The British Pound Sterling is the oldest currency in continuous use. It’s also the fourth most traded currency in the foreign exchange market, after the US dollar, the Euro, and the Japanese Yen, according to the Bank for International Settlements. Understanding the basics of the Pound is essential for anyone visiting or doing business in London.
1.1. What Are the Banknotes in Circulation in London?
The Bank of England issues banknotes in the following denominations: £5, £10, £20, and £50. Each note features a portrait of Queen Elizabeth II on one side and a famous British figure on the reverse.
- £5 Note: Features Winston Churchill
- £10 Note: Features Jane Austen
- £20 Note: Features J.M.W. Turner
- £50 Note: Features Alan Turing
These banknotes are legal tender throughout the UK. The polymer banknotes are more durable and secure, reducing the risk of counterfeiting. Always check the security features, such as the hologram and watermark, to ensure authenticity.
1.2. What Coins Are Used in London?
The Royal Mint produces coins in denominations of 1p, 2p, 5p, 10p, 20p, 50p, £1, and £2. Each coin features the portrait of Queen Elizabeth II on one side.
- Penny (1p and 2p): Copper-plated steel
- 5p and 10p: Nickel-plated steel
- 20p and 50p: Cupro-nickel
- £1 and £2: Bi-metallic
Keep an eye out for special edition coins, which are often released to commemorate significant events or anniversaries.
2. How to Handle Currency Exchange in London
Knowing how to handle currency exchange is essential to avoid unnecessary fees and get the best rates. Here’s a comprehensive guide to exchanging money in London.
2.1. Should You Exchange Money Before Traveling to London?
Exchanging a small amount of currency before traveling to London can be a good idea for immediate expenses like transportation from the airport. However, exchanging large sums in advance might not be the best strategy.
- Pros: Having some local currency upon arrival.
- Cons: Potentially worse exchange rates and higher fees compared to rates in London.
According to a study by the London School of Economics, exchange rates at your local bank might be less favorable than those you find upon arrival in London. Having a bit of GBP for immediate expenses can be helpful, but it’s best to avoid exchanging large amounts beforehand.
2.2. Where Can You Find the Best Exchange Rates in London?
Finding the best exchange rates requires research and comparing different options. Here are some places to consider:
- Banks: Major banks like Barclays, HSBC, and Lloyds offer currency exchange services.
- Currency Exchange Bureaus: Companies like Travelex and Moneycorp have branches throughout London.
- ATMs: Withdrawing cash from ATMs can offer competitive exchange rates.
Currency Exchange Bureau in London
Comparing rates is crucial. According to a survey by Which?, exchange rates can vary by as much as 5% between different providers. Checking online comparison tools before you exchange money can help you find the best deal.
2.3. What to Avoid When Exchanging Currency?
To avoid getting ripped off, steer clear of exchange services with hidden fees or unfavorable rates.
- Avoid: Airport exchange services and independent ATMs with high fees.
- Look for: Transparent fee structures and competitive exchange rates.
The Financial Conduct Authority (FCA) advises travelers to check for hidden fees and commissions before committing to an exchange. Always ask for a detailed breakdown of the costs involved.
3. Using Credit and Debit Cards in London
Credit and debit cards are widely accepted in London, but understanding the fees and policies is essential.
3.1. Which Cards Are Widely Accepted in London?
Visa and Mastercard are widely accepted at most retail establishments, restaurants, and hotels throughout London.
- Widely Accepted: Visa, Mastercard
- Less Accepted: American Express
- Rarely Accepted: Discover
Contact your bank before traveling to inform them of your travel plans and to understand any international transaction fees. A 2024 study by CreditCards.com found that international transaction fees typically range from 1% to 3% of the transaction amount.
3.2. What Are the Potential Fees for Using Cards Abroad?
Be aware of the potential fees associated with using your credit or debit card in London.
- Foreign Transaction Fees: Charged by your bank for using your card abroad.
- ATM Fees: Charged by the ATM operator for withdrawing cash.
- Currency Conversion Fees: Applied when converting transactions from GBP to your home currency.
According to a report by Bankrate, some credit cards waive foreign transaction fees, which can save you a significant amount of money. Consider applying for a travel credit card before your trip.
3.3. Are Contactless Payments Common in London?
Yes, contactless payments are very common in London. Most businesses accept contactless payments via credit and debit cards, as well as mobile payment systems like Apple Pay and Google Pay.
Contactless Payment Terminal in London
Contactless payments are convenient and secure. Transport for London (TfL) also accepts contactless payments on buses, tubes, and trains, making it easy to get around the city.
4. How to Use ATMs in London
ATMs, known as “cash points” or “cash machines,” are readily available throughout London. Here’s how to use them effectively.
4.1. Where Can You Find ATMs in London?
ATMs are located at banks, shopping centers, airports, and convenience stores throughout London.
- Banks: Barclays, HSBC, Lloyds, and NatWest have numerous ATMs.
- Other Locations: Shopping centers, airports, and convenience stores.
Using bank-affiliated ATMs is generally safer and cheaper than using independent ATMs. According to a survey by Which?, independent ATMs often charge higher fees and may not offer the best exchange rates.
4.2. What Are the Fees for Using ATMs?
Fees can vary depending on the ATM operator and your bank.
- Bank ATMs: Typically do not charge usage fees for customers of that bank.
- Independent ATMs: Often charge additional usage fees.
- Foreign Transaction Fees: Your bank may charge a fee for using an ATM abroad.
Check with your bank about international ATM fees before traveling. Some banks have partnerships with international banks that allow you to withdraw cash without fees.
4.3. How Much Cash Should You Withdraw?
Withdraw only the amount of cash you need to avoid carrying large sums and paying unnecessary fees.
- Consider: Daily spending habits and availability of card payments.
- Plan: Withdraw smaller amounts more frequently to minimize risk and fees.
The average ATM withdrawal in London is around £60, according to data from UK Finance. Adjust this amount based on your individual needs and spending habits.
5. Understanding Value Added Tax (VAT) Refunds
Non-EU residents can claim a refund on the Value Added Tax (VAT) paid on eligible purchases made in London.
5.1. Who Is Eligible for a VAT Refund?
Non-EU residents are eligible for VAT refunds on certain purchases.
- Eligibility: Non-EU residents who are leaving the UK.
- Requirements: Purchases must be for personal use and taken out of the EU.
According to HM Revenue & Customs, you must obtain a VAT refund form from the retailer at the time of purchase and have it validated by customs when leaving the country.
5.2. How to Claim a VAT Refund?
To claim a VAT refund, follow these steps:
- Obtain a VAT Refund Form: Ask for a form at the time of purchase.
- Complete the Form: Fill out all required information.
- Present to Customs: Show the form, receipt, and goods to customs officials when leaving the UK.
- Receive Refund: Refunds can be issued in cash, credited to your card, or sent via check.
VAT Refund Form Example
Heathrow and Gatwick airports have VAT refund counters. The average VAT rate in the UK is 20%, so claiming a refund can result in significant savings.
5.3. What Are the Common Mistakes to Avoid When Claiming VAT?
Avoiding common mistakes can ensure a smooth VAT refund process.
- Not obtaining a form: Always ask for a VAT refund form at the time of purchase.
- Not completing the form correctly: Ensure all information is accurate and complete.
- Not allowing enough time: Arrive at the airport early to allow time for customs processing.
According to a survey by Global Blue, a VAT refund service provider, many travelers miss out on refunds due to simple errors like not completing the form correctly or not allowing enough time at the airport.
6. Tips for Budgeting and Managing Money in London
Effective budgeting and money management are crucial for enjoying your time in London without overspending.
6.1. How to Create a Budget for Your Trip to London?
Creating a budget before your trip can help you stay on track and avoid financial stress.
- Estimate Expenses: Research costs for accommodation, transportation, food, and activities.
- Set a Daily Budget: Allocate a specific amount for each day.
- Track Spending: Monitor your expenses to ensure you stay within budget.
According to a report by TripAdvisor, the average daily spending for tourists in London is around £150 per person. Adjust your budget based on your travel style and preferences.
6.2. What Are Some Free Activities to Do in London?
London offers many free activities that can help you save money.
- Museums: Many major museums, like the British Museum and National Gallery, offer free admission.
- Parks: Enjoy a stroll through Hyde Park, Regent’s Park, or St. James’s Park.
- Walking Tours: Explore the city on foot with free walking tours.
Time Out London provides listings of free events and activities throughout the city. Taking advantage of these can significantly reduce your expenses.
6.3. How Can You Save Money on Transportation?
Transportation costs can add up quickly, but there are ways to save money.
- Oyster Card: Use an Oyster card or contactless payment for cheaper fares on buses, tubes, and trains.
- Travelcard: Consider purchasing a Travelcard for unlimited travel within specific zones.
- Walking and Biking: Walk or bike whenever possible to save on transportation costs and see more of the city.
Transport for London (TfL) offers various fare options to suit different needs and budgets. Planning your transportation in advance can help you save money.
7. Navigating Tipping Culture in London
Understanding tipping culture is essential for avoiding confusion and showing proper etiquette.
7.1. When Is Tipping Expected in London?
Tipping is customary in certain situations in London.
- Restaurants: 10-15% of the bill for good service.
- Taxis: 10% of the fare.
- Bars: Not customary, but appreciated for exceptional service.
According to a survey by Statista, most Londoners tip around 10% in restaurants. Check the bill to see if a service charge has already been added.
7.2. How Much Should You Tip?
The amount you tip depends on the quality of service.
- Good Service: 10-15%
- Exceptional Service: 15-20%
- Poor Service: No tip or a smaller amount.
If you receive poor service, it is acceptable to speak to the manager and explain your dissatisfaction.
7.3. Are There Any Situations Where You Shouldn’t Tip?
There are some situations where tipping is not expected.
- Fast Food Restaurants: Tipping is not customary.
- Retail Stores: Tipping is not customary.
- Government Services: Tipping is not customary.
In these situations, there is no need to feel obligated to leave a tip.
8. Understanding Common Scams and How to Avoid Them
Being aware of common scams can help you protect your money and have a safe trip to London.
8.1. What Are Some Common Scams in London?
Be aware of these common scams:
- Card Skimming: Criminals attach devices to ATMs to steal card information.
- Fake Ticket Sales: Selling fake tickets to popular attractions or events.
- Pickpocketing: Thieves targeting tourists in crowded areas.
The Metropolitan Police Service provides information and advice on how to avoid scams and protect your belongings.
8.2. How Can You Protect Yourself from Scams?
Take these precautions to protect yourself:
- Use ATMs at Banks: These are generally more secure.
- Buy Tickets from Official Sources: Avoid street vendors selling tickets.
- Be Aware of Your Surroundings: Keep your belongings secure and be cautious in crowded areas.
According to a report by Action Fraud, the UK’s national fraud and cybercrime reporting center, thousands of tourists fall victim to scams each year. Staying vigilant can help you avoid becoming a target.
8.3. What to Do If You Become a Victim of a Scam?
If you become a victim of a scam, take these steps:
- Report to the Police: File a report with the Metropolitan Police Service.
- Contact Your Bank: Notify your bank immediately to cancel your cards and monitor your accounts.
- Keep Records: Keep records of all transactions and communications.
Having these steps in mind can help minimize the damage and prevent further loss.
9. Using Mobile Payment Apps in London
Mobile payment apps are increasingly popular in London, offering a convenient way to pay for goods and services.
9.1. Which Mobile Payment Apps Are Popular in London?
Popular mobile payment apps include:
- Apple Pay: Widely accepted at many retailers.
- Google Pay: Another popular option for Android users.
- PayPal: Used for online transactions and some in-store purchases.
These apps allow you to make payments using your smartphone, offering a secure and convenient alternative to cash and cards.
9.2. How to Set Up and Use Mobile Payment Apps?
Setting up a mobile payment app is straightforward:
- Download the App: Download the app from your app store.
- Add Your Card: Add your credit or debit card information to the app.
- Verify Your Identity: Follow the app’s instructions to verify your identity.
- Start Paying: Use your phone to make payments at participating retailers.
Most mobile payment apps use encryption and tokenization to protect your financial information.
9.3. What Are the Benefits of Using Mobile Payment Apps?
Mobile payment apps offer several benefits:
- Convenience: Pay with your phone instead of carrying cash or cards.
- Security: Enhanced security features protect your financial information.
- Rewards: Some apps offer rewards or cashback on purchases.
According to a survey by Visa, mobile payments are becoming increasingly popular, with many consumers preferring the convenience and security they offer.
10. Frequently Asked Questions (FAQs) About London Money
Here are some frequently asked questions about using money in London.
10.1. Can I Use Euros in London?
No, Euros are not widely accepted in London. The official currency is the British Pound Sterling (£). Some tourist-oriented businesses may accept Euros, but they are not obligated to, and the exchange rate is likely to be unfavorable.
10.2. What Is the Best Way to Carry Money in London?
The best way to carry money in London is a combination of methods:
- Debit/Credit Cards: Use for larger purchases and at established businesses.
- Mobile Payment Apps: For quick and convenient transactions.
- Cash: For smaller purchases, markets, and situations where cards are not accepted.
10.3. Are Traveler’s Checks Accepted in London?
Traveler’s checks are not widely accepted in London. Modern payment methods like debit and credit cards are more convenient and widely used. If you have traveler’s checks, you may be able to cash them at select locations, but it’s best to rely on other payment methods.
10.4. How Do I Report a Lost or Stolen Card in London?
If your card is lost or stolen in London, take these steps:
- Contact Your Bank: Report the loss or theft immediately to cancel your card.
- File a Police Report: Report the incident to the Metropolitan Police Service.
- Monitor Your Accounts: Keep an eye on your accounts for any unauthorized transactions.
10.5. Is It Safe to Use ATMs at Night in London?
Using ATMs at night can be safe, but take precautions:
- Use ATMs at Well-Lit Locations: Choose ATMs in well-lit, public areas.
- Be Aware of Your Surroundings: Pay attention to your surroundings and avoid using ATMs if you feel unsafe.
- Cover the Keypad: Protect your PIN by covering the keypad when entering it.
10.6. Can I Negotiate Prices in London?
Negotiating prices is not common in most retail establishments in London. However, you may be able to negotiate at markets, antique shops, or when purchasing large items. It doesn’t hurt to ask politely.
10.7. What Should I Do with Leftover British Pounds When Leaving London?
When leaving London, you have several options for dealing with leftover British Pounds:
- Exchange Back to Your Currency: Exchange your pounds back to your home currency at the airport or a currency exchange bureau.
- Spend Them: Use them to make last-minute purchases at the airport.
- Save Them: Keep them for future trips to the UK.
- Donate Them: Donate them to a charity.
10.8. Are There Any Hidden Fees I Should Be Aware Of?
Be aware of these potential hidden fees:
- ATM Fees: Check for fees before using an ATM.
- Foreign Transaction Fees: Understand the fees charged by your bank for using your card abroad.
- Currency Conversion Fees: Be aware of the fees applied when converting transactions from GBP to your home currency.
10.9. How Can I Find the Nearest Currency Exchange Bureau?
You can find the nearest currency exchange bureau by:
- Using Online Search Engines: Search for “currency exchange near me” on Google or other search engines.
- Using Apps: Use currency exchange apps to find nearby locations.
- Asking Locals: Ask hotel staff or locals for recommendations.
10.10. What Is the Emergency Number to Call for Financial Assistance in London?
In case of a financial emergency in London, you can:
- Contact Your Bank: Call your bank’s international customer service number.
- Report Fraud: Report fraud or financial crimes to Action Fraud at 0300 123 2040.
- Seek Consular Assistance: Contact your country’s embassy or consulate for assistance.
Remember to keep important contact information readily available in case of emergencies.
Understanding “what is London money called” and how it works is crucial for a smooth financial experience in London. From currency exchange to using cards and avoiding scams, being informed can save you money and stress.
Ready to take control of your finances and make the most of your money? Visit money-central.com for comprehensive guides, helpful tools, and expert advice tailored to your needs. Whether you’re planning a trip to London or looking to improve your personal finances, we have the resources you need. Explore our articles, use our budget planners, and connect with financial advisors today. Take the first step towards financial freedom with money-central.com. Address: 44 West Fourth Street, New York, NY 10012, United States. Phone: +1 (212) 998-0000. Website: money-central.com.
