One of the tasks I seem to spend vast quantities of time on when I am working at Bamfords is cataloguing collections of coins. Much of what comes in is base metal and well used, and has little value; some is in various purities of silver and needs sorting. If circulated, everything not a rarity is estimated at bullion price. Collectors though like their coins in the best possible condition, even, if possible the scarce and rare ones.
Other collectors buy new issues from the Mint direct so that they do not have to worry about the arcane business of grading for wear. The Mint issues coins either in brilliant uncirculated (BU) condition (that is, as first issued), or proof. The latter is when the specimens are struck from specially polished dies, giving the field a mirror-like brilliance, and often, these days, with the relief portions of the design given a frosted finish to enhance the contrast. The mint tends to issue both base metal and precious metal examples of most issues and, since realising how much extra money they can make from having several different commemoratives each year, there is a bewildering choice. Furthermore, buying direct means that one pays a premium even for the simplest (card folder) packaging, let alone de luxe and executive packaging, involving hefty leather and satin rich presentation boxes.
The coins themselves, if BU, are worth their face value; the mint’s packaging thus makes them expensive to buy and takes a couple of generations to recoup the outlay. For instance, as I write, today’s paper carries an advertisement from the Mint about a Paddington Bear 50p issue, which is BU base metal and can be yours for £3.99 plus postage: that is, a mark-up of £3.49. If the issue is proof, then it loses value less and, of course, with issues struck in precious metals at least their bullion value remains in line with gold and silver process generally. Yet in both cases the purchase price includes a hefty mark-up to cover manufacturing costs (special dies) and better grade packaging.
Proof coins have been officially issued since 1887 (earlier ones were strictly unofficial, especially prior to 1731/32), as have another popular collector’s item, the specimen set: in these one buys all the coins issued for a particular year in a special package, either BU, proof or precious metal proofs. Specimen sets used to be issued only at the beginning of a new reign or when the obverse (head side) changed, eg. 1887, 1893, 1902. 1911, 1927. 1937 and so on. It was not until 1977 that yearly specimen sets became regular, although at first they were BU only and base metal, until 1981 when the £5 coin and sovereign were included. Indeed, gold only sets – £5, £2 sovereign and half sovereign) were issued in 1982, although the £2 was thereafter dropped, re-appearing as a base metal coin from 1986 and regularly a decade later.
With so much choice, collecting from new becomes a matter of deciding what you like and can afford, but do not expect your investment to grow for a considerable time, unless you are well enough off to collect bullion coins. Many collectors stick to crown coins – old 5/-, then 25p but more recently with face value of £5. Again, there are many commemorative issues. There are at least one commemorative each year these days, and one can collect the standard £5 coin from your bank or building society, but there are also base metal proofs, silver proofs and gold ones, too. Furthermore, sometimes the proofs are struck double thickness – called a piedfort – and since 2004 these have also been issued in platinum – current list price £4,000 plus! I shall cover commemorative crowns on another occasion, however.
Well-struck coins are essentially a miniature work of art, but the best way to collect them is to buy at auction, preferably in their unopened sets. Whereas today you might pay £55 for this year’s specimen BU set, £95 for the current commemoratives in a set (£5 Prince Louis, three £2: RAF, Armistice and Mary Shelley’s Frankenstein and a 50p for the 1918 Representation of the People Act), you then could also shell out £210 for a premium proof set and no less than £550 for the silver proof set struck as piedforts. At auction in a year or two, when collections get to the saleroom, prices are going to be more like £20, £45, £80 and £285 respectively. Incidentally, the 5 coin commemorative set also comes in gold (at a price).
The latest trend, started by the private mints (like Pobjoy, Westminster, London Mint Office etc., mainly at the instigation of the marketing executives of various insular crown colonies etc.) has been to issue proofs in base metal or bullion with coloured enamel designs: hence the Royal mint will now sell you a Peter Rabbit set or a Winnie the Pooh set (both basically 50 pence coins) with coloured Peter or Winnie in various engaging contexts. The former is a set of four, the latter only two, and will cost you 10p BU or £60 enamelled, whilst there is no reduction if you buy the coins in a set, for while the Peter Rabbit sequence is not sold as a set, for Paddington’s set of two – £120; you can even order the latter in gold, a snip at £780!
The sensible thing to do is to concentrate on a particular period, like specimen sets pre-2000, or pre-decimal issues and buy at auction or from reputable dealers. That way you will accumulate really rather attractive coins, mainly attractively packaged, which will also have a chance of appreciating. And, of course, rarity counts, so buy a price guide: Seaby, Coin News and MyHobbyStore all produce helpful ones, but most important, the former two both give mintages which will guide you as to rarity.