Just as with coins, condition plays a very important role where the values of banknotes are concerned. Most collectors will attempt to collect the banknotes in the best condition they can afford. With modern banknotes this will nearly always be uncirculated (mint condition) examples, as such examples of modern banknotes are usually easily obtainable. With this in mind, most well-used, tatty, creased and dirty banknotes that have exchanged hands many times are only likely to be worth their face value.
There are four denominations of Bank of England bank notes in circulation.
A note on Scottish, Northern Ireland and Welsh Bank notes:
In Scotland: Bank of England bank notes are readily accepted and can be used for all transactions. Three Scottish banks also have the right to issue their own bank notes, namely Bank of Scotland, Royal Bank of Scotland and Clydesdale Bank. These notes are technically not legal tender in any part of the UK but are legal currency and approved by the UK Parliament. They can be spent all over the UK, but in reality they may not be accepted by some merchants/banks etc outside of Scotland. More information about the different types of current Scottish notes can be found in the pdf file here. This PDF file is provided by The Committee of Scottish Bankers.
In Northern Ireland: Bank of England bank notes are readily accepted and can be used for all transactions. Four Northern Ireland banks also have the rights to issue their own bank notes, namely Bank of Ireland (UK) plc, First Trust Bank, Northern Bank Ltd (Danske Bank) and Ulster Bank Ltd. The same legal position applies to Northern Ireland bank notes as it does to Scottish bank notes in that they are legal currency approved by the UK Parliament but may not be readily accepted everywhere outside Northern Ireland. More information about NI (and Scottish) bank notes can be found on the website of The Association of Commercial Banknote Issuers.
In Wales: Only banks that were issuing bank notes before the 1844 UK Bank Charter Act was passed are permitted to continue producing them. There are no Welsh banks that meet this criteria.