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On its 40th birthday, the pound in your pocket is now worth just 30p

British one pound sterling coins - AFP
British one pound sterling coins - AFP

Picture the scene: it’s the summer of 1983 and you walk into your local corner shop. Every Breath You Take by The Police is top of the charts and blares from the radio in the corner.

You hum along as you reach into your pocket for the pound coin you know is there. With this humble piece of nickel brass, the world is your oyster.

What could you buy? Well, a single pound coin back then gave you enough purchasing power to afford six 16p first-class stamps, to keep up with your various pen pals. Or you could ignore your pen pals and buy six Mars Bars instead.

You could buy two loaves of bread (38p each), a dozen eggs (73p) and, if you scrounged an additional 2p, an entire pack of Benson and Hedges cigarettes.

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But sadly inflation has not been kind to that beleaguered yet beloved piece of nickel brass.

Its worth has been eroded by the passage of time.

Today, 40 years after its introduction, the pound coin in your pocket is worth just 30p, The Telegraph can reveal. It has lost 70p of its buying power due to inflation, which has yet to drop below double digits, figures released this week showed.

These days, the humble "quid", now adorned with an inner ring of nickel-plated alloy, does not even afford you a single stamp (£1.10), while even one loaf of bread (£1.38) is now well out of reach.

And those cigarettes? Sorry, but thanks to inflation and a hefty helping of tobacco duty, those now cost £13.90. And a pint? In 1983, buying a pint of London Pride with a pound coin would have left you with 42p change. Today one costs £4.50.

On Friday, the pound coin celebrated its 40th birthday, but its earliest ancestor can be traced as far back as 1489 when Henry VII introduced the Sovereign, which was then made of solid gold and worth 20 shillings. Variations would come and go in the intervening years as the unite and later the guinea.

On two occasions, both in 1897 and 1915, war hoarding required that the pound coin take the form of a banknote, so gold could be used to fund the various wars Britain was mucking in with. Not until 1983 was the pound coin as we know it first minted, featuring the Royal Arms. In the 40 intervening years, four bridges have featured on the reverse side of the coin (the Forth Railway Bridge, the Menai Bridge, the Egyptian Arch Bridge and the Millennium Bridge).

The pound did not have its first proper makeover until 2016 when it was refigured to be a dodecagon rather than a circle. Roughly 650 million of the new coins were minted, each with a hidden high-security feature to prevent counterfeiting. It is considered the most secure coin in circulation today.

A shame then, that the coin’s functionality has diminished – and not just because vending machines are as contactless-friendly as supermarkets. Inflation has ravaged Britain’s spending power.

The average house costs £27,386, compared to £290,000 today, according to figures provided by investment firm Hargreaves Lansdown.

A weekly shop would cost a family £8.54. These days families spend £26.38 a week on food. Supermarket prices have soared as the war in Ukraine pushed energy costs to record highs and soaring costs faced by farmers were passed to shoppers.

As British society becomes less reliant on cash, the pound's future looks uncertain. Coins featuring King Charles III have yet to enter circulation. A set of commemorative 50p and £5 coins featuring His Majesty will be released later this month, but there has been no word on when pound coins featuring the King will be behind tills.

The passing of Queen Elizabeth II has not meant that coins bearing her likeness have spiked in value, either. On eBay, various eras of coin command a price of between £2 and £20, which while still higher than their face value are far from the price tags attached to vintage stamps or trading cards.

Robert Parkinson, of the website and author of Ecoinomics, said: “Where coins are concerned, collectors need to think of supply and demand. If millions of examples of a coin still survive and there are only a few thousand collectors, then the coin will not be worth much as demand will be comfortably met by supply.”