Money & Tipping in London

London is an easy city to visit without carrying much cash. Pounds sterling are the local currency, contactless card and phone payments are widespread, and Transport for London accepts contactless pay-as-you-go across most of the network. The main mistakes visitors make are paying unnecessary conversion mark-ups, switching between different cards on public transport, and tipping twice when a restaurant has already added a discretionary service charge.

This guide covers cards, cash, ATMs, transport payments, foreign-exchange choices, restaurant service charges and what Londoners normally do when tipping.

Currency basics: pounds and pence

The UK currency is pounds sterling, usually shown as £ or GBP. One pound contains 100 pence. Bank of England notes circulate in England, while Scottish and Northern Irish banks also issue their own sterling notes. Those notes are genuine sterling, although some London businesses may be less familiar with them than Bank of England notes.

“Legal tender” is not a useful shopping rule: it is a narrow legal concept about settling debts, not a requirement that every shop accept every note. Businesses can set their accepted payment methods, and some London venues are card-only.

Do you need cash in London?

For most short visits, cash is a backup rather than the main payment method. Hotels, supermarkets, attractions, restaurants, pubs, cafés and most transport are set up for cards or digital wallets. A small amount of cash can still be useful for an occasional market stall, small donation, independent business or as contingency if a card fails.

Do not arrive carrying hundreds of pounds simply because an old guide says London is cash-based. It is not.

Contactless cards and phone payments

Contactless is normal across London. Visa and Mastercard contactless cards are widely accepted, and Apple Pay or Google Pay work in many of the same places. Your own bank can still charge foreign-transaction or currency-conversion fees even when the London business itself adds no card surcharge, so check your card’s overseas terms before the trip.

If a card terminal offers to charge you in your home currency instead of pounds, look carefully at the exchange rate and fees. Dynamic currency conversion can make the price less favourable. Paying in GBP usually lets your card issuer handle the conversion under its own published terms.

Using contactless on the Tube, buses and trains

Transport for London’s pay-as-you-go system is one of the strongest reasons to use contactless. Touch in and out with the same physical card or same device on rail journeys, and touch in once on buses and trams. TfL applies daily capping and, where eligible, weekly capping to the payment token you actually use.

That means a phone and the physical card linked to that phone are treated as different payment devices. If you touch in with a bank card and touch out with a watch or phone, the system may not match the journey correctly. Pick one card or device and keep using it.

Contactless versus Oyster for visitors

For many adult visitors, contactless pay-as-you-go is simpler than buying a separate Oyster card. Fares and daily caps are generally aligned, but there are exceptions and practical reasons to prefer Oyster: some overseas cards are not accepted reliably, some banks charge foreign transaction fees, and Oyster can support certain visitor or child discounts that a normal foreign bank card cannot.

Families should not assume one contactless card can pay for several people through the same gate. Each traveller using pay-as-you-go needs their own valid card/device or appropriate Oyster/ticket arrangement.

ATMs: use bank machines carefully

ATMs are easy to find. Prefer machines operated by established banks or clearly identified major providers, and read the screen before accepting any fee or currency conversion. Your home bank may charge its own withdrawal fee in addition to anything shown locally.

If the ATM offers to convert the withdrawal into your home currency, compare carefully. You can often decline that conversion and request the transaction in pounds, leaving conversion to your bank. Never accept a rate simply because the machine labels it “guaranteed”.

Exchanging cash

If you need to exchange physical currency, compare the final amount of pounds you receive after commission and fees rather than focusing only on a headline “0% commission” sign. Airport and major-station exchange desks are convenient but convenience does not guarantee the best rate.

For a card-friendly London itinerary, most travellers need little reason to exchange a large amount of cash in advance.

Are card surcharges normal?

UK consumer rules prohibit many businesses from adding a surcharge purely because you pay with a consumer debit or credit card or common electronic payment method. That does not mean every final price is free of fees — businesses can have legitimate booking, delivery or optional-service charges — but a surprise “credit-card fee” at a normal consumer checkout should not be treated as standard London practice.

Restaurant tipping: check the bill first

Tipping in London is discretionary, not compulsory in the American sense. VisitBritain and Visit London both advise that restaurants commonly add an optional service charge, often around 12.5%. If a service charge is already on the bill, you generally do not need to add another tip.

If no service charge is included and the service was good, a tip around 10–15% is a normal range. You can tip less, more or not at all depending on service. The key habit is to read the bill before tapping through any additional tip prompt on the card machine.

What does “discretionary service charge” mean?

A discretionary service charge is an optional amount added to the bill. If you are unhappy with the service, you can ask for it to be removed. If you are happy to pay it, there is no social need to add another percentage on top unless you genuinely want to.

For large groups, restaurants are particularly likely to add service automatically. Again, check rather than guessing.

Pubs and bars

At a traditional pub where you order drinks at the bar, tipping is not normally expected. Paying the displayed price and taking your drinks is completely ordinary. In cocktail bars, table-service venues or places with a service charge, the situation can look more like a restaurant, so check the bill.

You may still see card terminals asking whether you want to add a tip. The prompt does not turn an optional tip into an obligation.

Cafés, bakeries and takeaway counters

Tipping at a counter-service café is optional. A tip jar or digital prompt is simply an invitation. Round up or leave a small amount if you received particularly helpful service, but do not feel that every coffee purchase requires a percentage calculation.

Taxis, black cabs and ride-hailing apps

For licensed taxis, many Londoners simply round up the fare. VisitBritain notes that a 10–15% taxi tip can be a nice gesture, especially after good service, but it is not mandatory. Ride-hailing apps normally provide an optional tip function after the trip.

If a driver handles significant luggage or helps with accessibility needs, you may choose to tip more, but there is no universal fixed rule.

Hotels, porters and housekeeping

Hotel tipping is modest and optional. VisitBritain suggests roughly £2 for a porter taking luggage to your room, while housekeeping and concierge tips depend on the service provided. Check whether any restaurant or room-service bill already includes a service charge.

Tour guides and “free” walking tours

Paid tours may include all guide costs in the ticket; an additional tip is optional. “Free” walking tours operate differently: the guide may depend heavily on participant tips even though there is no upfront ticket price. Decide based on the tour quality, length and group size rather than assuming the word free means nobody expects payment.

Markets and street food

Major London markets increasingly accept contactless payments. Borough Market, Camden and other busy visitor markets are not good reasons to carry large amounts of cash. A few independent traders may have different payment preferences, so keeping a small backup is sensible.

Do not assume a market’s payment mix will be identical every day; individual stallholders can change.

Keeping your cards safe

Use the same basic precautions you would in any large city. Keep your card or phone under your control, shield PIN entry, and check payment-terminal amounts before tapping. On crowded transport or in busy nightlife areas, store wallets and phones securely rather than in an open back pocket.

Enable transaction notifications if your bank offers them. They make it much easier to spot a duplicate or unexpected charge quickly.

What to do if your card stops working

Carry a second payment method stored separately from your primary card. If your normal contactless card fails on TfL, do not repeatedly switch cards mid-journey without understanding how that affects touch-in/touch-out matching. Use an alternative valid payment method for the whole new journey and check your TfL payment history later if needed.

If your bank blocks overseas transactions, contact the bank through its official app or number rather than trusting unsolicited messages claiming to be fraud alerts.

A simple money setup for a London trip

• Bring one primary no-or-low-foreign-fee card if you have one.
• Bring a second card from a different account or network as backup.
• Keep a modest amount of cash, not your entire spending budget.
• Choose one contactless card or device for TfL and use it consistently.
• Pay in GBP unless you have checked and deliberately prefer a merchant’s conversion offer.
• At restaurants, read the bill for service charge before adding a tip.
• Remember that pubs and counter-service cafés generally do not require tipping.

The short version

London is overwhelmingly card-friendly. Use pounds, not your home currency, for most transactions; keep one payment method consistent on TfL; carry a second card and a small cash backup; and treat tipping as discretionary. Restaurants are the main place to think about tips, and even there the first question is simply: has service already been added?