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Paper money as we recognise it today originated in Britain in the 17th Century as a receipt for gold deposited with goldsmith bankers. The Bank of England issued notes or receipts for deposits of cash (coin) from its inception in 1694. These originally were handwritten and made out to specific depositor. They then became partially printed, the words 'or the bearer' were added after the promise to pay the depositor, and these pieces of paper began to circulate as the forerunners of today's banknotes.

A commercial crisis in the autumn of 1792, together with the declaration of war on England by the French in February 1793 led to a need for notes of a smaller denomination than £10 (previously the smallest note printed) in which the public could feel confident. The £5 note was only intended as a temporary measure - the Prime Minister, William Pitt, at the time said that once credit conditions were more favourable again, they should take the £5 out of circulation. However, the £5 has since become the longest continuously-serving denomination and at one point even the highest denomination Bank of England note.