Humble £5 note gets a boost from the Bank

The number of £5 notes dispensed from cash machines will have soared five-fold by Easter next year. Around £122 million of the notes will be dispensed from ATMs each month by April, up from £22m now.

The increase follows a range of initiatives by the Bank of England to get more 5 notes into circulation, including pilot schemes with HSBC and Sainsbury's, under which the notes were dispensed from ATMs and given out in change.

A number of other financial institutions and ATM operators are now dispensing the notes, while other large retailers are also giving more out in change.

As a result, by 2012 it is estimated that an extra 400 million 5 notes will be in circulation.

The notes should also be sorted more often, meaning that the average quality should improve too. Because 5 notes get used more regularly than higher denomination notes, they have a much shorter lifespan - the average 5 note lasts only a year before it becomes too damaged to use, whereas 50 notes last for five years or more.

Bank of England governor Mervyn King said: "By Easter next year, the number of 5 notes dispensed from ATMs should have increased five-fold.

"In addition, some other large retailers are also working to increase the number of 5s they give out as change. The fiver should start looking as smart as the three other denominations."

Despite advances in payment technology, demand for bank notes is continuing to grow, and there is particular demand for more 5 notes.

The Bank has 300 million 5 notes ready to enter circulation. However, 70 per cent of notes initially reach the public through ATMs, the majority of which do not dispense fivers.

With too few 5 notes in circulation, retailers generally use those that they have as change rather than banking them, reducing the opportunities for poor quality notes to be withdrawn from circulation.