It wasn’t until I received a recent £25 prize payment from National Savings in respect of a Premium Bond win in the form of a warrant that I realised there are in fact numerous ways of paying by paper.  I have listed below the methods I know.

    • Cash
    • Cheque
    • Bank draft
    • Warrant
    • Travellers cheques
    • Vouchers
    • Board game money
    • IOU/Ransom note/Kidnap demand

Clearly everyone knows what cash is.  It is represented by notes and of course coins.


On 30 March the Bank of England reminded consumers and businesses about the withdrawals of paper £20 and £50 notes on 30 September this year.  The new polymer notes will continue to be allowed.  So technically one paper method of payment will disappear soon.

Cheques, bank drafts and warrants all have the look and feel of cheques but there are in fact differences between them.  


A cheque has an unlimited timescale for presentation and clearing*.  The downside is that there is no guarantee that the cheque will actually clear when it is presented so it could bounce.

A warrant looks and feels like a cheque.  Pretty much the only organisation I know that pays warrants is the National Savings and Investments Bank.  Warrants have an expiry date.  So Premium Bond prize warrants expire after three months but in practice National Savings will provide replacement warrants for expired ones.  Strangely the payee has to sign the warrant on receipt from the payer.

As for bank drafts again they look very much like cheques but there is a major difference.  A bank draft is guaranteed to clear when it is paid into the recipient’s bank account.  A major benefit.

While travellers’ cheques aren’t as common as they were, you can still purchase them from a number of institutions, including: The Post Office. A bank. Currency exchange offices.

What are travellers’ cheques? Put simply, travellers’ cheques are pre-written cheques for a fixed amount. You can exchange them for cash while you are away or use them to pay for items directly. You can choose to have them in sterling or in the currency of the country you are travelling to.

Then there are vouchers especially gift vouchers.  The main downside of these vouchers is that they usually have an expiry date of typically 12 months.  So it’s a case of use it or you lose it.

Board game money such as in Monopoly is technically paper money but of course it can only be used in the context of gaming.

As for IOUs, ransom notes and kidnap demands I just added them to the list for a bit of fun!  It made my blog sound more interesting!  Money doesn’t have to be dull and boring.  You know it makes sense.**




Risk warnings

* Cheques don’t have an expiry date but, in practice, banks will usually reject a cheque if you try to pay it in or cash it more than six months from the date of issue.

**The value of investments can fall as well as rise. You may not get back what you invest. The information contained within this article is for guidance only and does not constitute advice, which should be sought before taking any action or inaction. The above taxation information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change. This blog is based on my own observations and opinions. 



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