Britain once divided a pound into 240 pennies.

The old system combined two different counting scales: twelve pence made one shilling, and twenty shillings made one pound. Multiplying twelve by twenty gives the apparently surprising total of 240 pennies.

Decimalisation changed the subdivisions, not the value of the pound itself. Someone holding one pound did not suddenly lose 140 pennies of spending power, because the new penny represented a larger fraction of that same pound.

The change simplified accounting and everyday calculations by making money work in hundreds. It also demanded extensive preparation, including new coins, conversion guidance, equipment changes and a public information campaign.

For generations, British shoppers calculated prices in pounds, shillings and pence. Familiarity made the system workable, but adding bills or checking change required more than ordinary decimal arithmetic. A total of twelve pennies had to become a shilling, while twenty shillings had to become a pound. Written accounts often needed separate columns for all three units.

The idea of simplifying the currency was much older than the eventual change. The Royal Mint identifies a parliamentary call for decimalisation in 1847. Yet a familiar monetary system is difficult to replace: businesses need time to adapt, and customers need confidence that unfamiliar price labels are not disguising a different charge.

A government committee established in 1961 considered the issue, and Chancellor James Callaghan announced the decision on 1 March 1966. The pound would remain the main unit, divided into one hundred smaller units. Although alternative names were considered, the familiar words pound and penny survived. The official changeover date was set for 15 February 1971.

Preparing enough coins was an industrial undertaking as well as an administrative one. A new Royal Mint facility at Llantrisant in South Wales opened in 1968, with decimalisation a major reason for its creation. The Royal Mint describes the production programme as requiring nearly six billion coins. The new monetary arithmetic depended on a huge physical supply of change.

The conversion is easiest to understand through fractions of a pound. One old shilling was one twentieth of a pound, so it became five new pence. Two shillings became ten new pence. One new penny was therefore equivalent to 2.4 old pence, not one old penny. Some small prices could not be converted exactly into whole new pennies, making conversion tables and rounding important.

The words old and new are essential when comparing amounts across the transition. A historical price of 100 old pence was less than half a pound, whereas 100 new pence meant exactly one pound. Neither figure alone tells us what the money could buy, which also depends on the prices and wages of the period.

Decimalisation is easiest to picture as changing the ruler used to divide a pound, not replacing the pound with a smaller sum. The old ruler had 240 divisions; the new one had 100. Fewer divisions meant each new penny represented a larger share of the same unit.