Royal Mint is warned that one in 20 £1 coins is fake

BBC study finds fake rate is twice as high as first thought

The pound in your pocket may be worth even less than you thought. According to an investigation by the BBC, as many as one in 20 £1 coins may be a forgery – double the Royal Mint's estimate.

Willings, a company that specialises in detecting counterfeit coins for the banks and vending-machine industry, said that as many as 73 million may be circulating. The recession provides an additional incentive for people to turn to less legitimate methods of making money and the scale of forgery appears to be rising. In the last quarter of 2008, the Royal Mint removed 270,000 fake pound coins from circulation, compared with 97,000 for the whole of 2007. The Royal Mint said: "We are concerned at the apparent upward trend."

A spokesman for Willings said: "We would estimate that as many as 5 per cent of coins we test are fakes. We've been collating them for the past four months or so, and already have a collection of several hundred.

"We can manage a 50 to 60 per cent detection rate while the machines being used by the Royal Mint can only pick up around 30 to 40 per cent."

The former Queen's Assay Master Robert Matthews added: "The Mint is really trying to play down the problem and keep it as low-key as possible. They've not produced any publicity material for banks to tell us how to differentiate between real and fake coins. They don't want to undermine public confidence in the coins – you might get people refusing to take them."

A further challenge to the pound comes from the Swaziland lilangeni coin, worth about 14p and extremely similar to the British coin. While Royal Mint is making little comment, there is an outside chance that the authorities will be forced to withdraw the existing coins and replace them with a design that is harder to copy.