The Treasury believes that around three per cent - amounting to a total of £45m - of pound coins are fake.
To combat the problem a new 12-sided pound coin will be introduced in 2017.
But until then how can you tell if your pound coins are genuine or fake?
Key signs of a fake are:
- Quality. A genuine coin will have sharp, clearly defined markings of the Queen's head or the picture on the flip side.
- Alignment. The Queen's head and the picture on the flip side should line up, as in the image above. They are often askew on fake coins.
- Design. The design on the reverse of the coin corresponds with a specific year of production. A list of the correct designs can be found here
- Colour. If the colour does not match the usual colour of most pound coins it is likely to be fake, or if on old coin shows no sign of ageing it could be fake.
- Milled edge. Uneven depth in the lettering or spacing is a sign of a fake.