The old “round pound”, which was introduced more than 30 years ago, will be in circulation alongside the new coin until it ceases to be legal tender on October 15.
People are being urged to return the £1 coins before they lose their legal tender status. They can either spend them before October 15 or bank them.
Around £1.3 billion worth of coins are stored in savings jars across the country, and the current £1 coin accounts for nearly a third of these, the Government said.
Some of the round £1 coins returned by the public will be melted down and reused to make the new £1 coin, which was announced in the 2014 Budget.
The new £1 coin, which resembles the old threepenny bit, has been hailed as “the most secure coin in the world”. It boasts several new security features, including a hologram.
Replacing £1 notes, £1 coins were first launched on April 21, 1983. The Royal Mint has produced more than 2.2 billion round pound coins since that time.
But there have been concerns about round pounds being vulnerable to sophisticated counterfeiters. Around one in every 30 £1 coins in people’s change in recent years has been fake.
When the new coin enters circulation on March 28, it might take a little while for people to start seeing it in their change as it gradually filters into general use.
The new coin is made of two metals, with a gold-coloured outer ring and a silver-coloured inner ring. It has an image that changes from a “£” symbol to the number “1” when the coin is seen from different angles. It also has very small lettering on both sides of the coin and milled edges.
It is thinner and lighter than the round pound, but its diameter is slightly larger.
Announcing the date when the new coin will enter circulation, Chief Secretary to the Treasury David Gauke said: “March 28 should be an important date in everybody’s calendar this year - as we will have a new quid on the block.
“This is a historic moment as it’s the first time we’ve introduced a new £1 coin since 1983, and this one will be harder to counterfeit than ever before.
“Our message is clear: if you have a round one pound coin sitting at home or in your wallet, you need to spend it or return it to your bank before October 15.”
Businesses handling cash have been planning and preparing for the new coins.
Helen Dickinson, CEO of the British Retail Consortium (BRC), said there will be a transition period during which some vending systems may only be able to accept the old coin.
She said: “Through the British Retail Consortium, most major UK retailers have been engaged in discussions and planning with the Royal Mint and Her Majesty’s Treasury since the March 2014 announcement that a new pound coin would be introduced in 2017.
“Our aim is to ensure that the implementation of the new coin runs as smoothly as possible for our customers and staff. Our combined input into the project means we’re confident the new coin will address the issue of counterfeit coins for businesses and the general public alike, and will prove highly secure for customers to use.
“While there will be a natural transition period where some vending systems may only be able to accept the existing pound coin, our industry is committed to ensuring we’re fully prepared ahead of the launch in March.”
Association of Convenience Stories chief executive James Lowman said: “The introduction of a new £1 coin is a positive step toward taking counterfeit coins out of circulation.
“It is essential that retailers are prepared for the introduction of the new £1 coin, as the transition is likely to affect a number of areas of their business especially if they have coin-operated machines such as self-service tills in store.
“We encourage retailers to make use of the guidance provided by the Royal Mint and to speak to their suppliers of coin-operated machines as soon as possible to make the transition as smooth as possible for consumers.”
Here are some facts about the new £1 coin and coins generally produced by the Royal Mint:
:: The Royal Mint has produced over 2.2 billion round pound coins since 1983 - equating to the weight of nearly 6,000 elephants
:: Twenty five different designs have appeared on the pound coin, from dragons to trees
:: The Royal Mint will make over 1.5 billion of the new £1 coins
:: If you put these coins side by side, there would be enough to go from the UK to New Zealand and back
:: The new £1 coin is based on the design of the old 12-sided threepenny bit, which went out of circulation in 1971
:: It is being made at the Royal Mint in Llantrisant, Wales, at a rate of up to 2,000 each minute
:: Some of the round £1 coins returned by the public will be melted down and reused to make the new £1 coin
:: The oldest British coins in the Royal Mint’s collection date back over 2,000 years.