Like the US, it's all Base 10:
100 Pence = 1 Pound
Coins start at 1 penny, then 2 pence, then 5. It starts over at 10 pence (p), 20p, and 50p. Finally there are 1 pound and 2 pound coins (no 1 or 2 pound notes). The first note is 5 pounds, followed by 10s and 20s. There may be larger denominations, but also like the US, are not in normal circulation.
The language of money is interesting, too. A typical way of stating a price might be "that's 2 pounds 50" meaning 2 pounds, 50 pence, written £2.50, just like the US. Things that are less than a pound are usually just something like "60p". Another word for the pound is "quid", as in "that'll be 30 quid". You also hear things like "just give me a fiver", meaning a five pound note, or a "tenner", a ten pound note.
The thing you have to watch out for is the exchange rate. Prices can be deceiving in that a meal may be £10.50. When you realize the exchange rate is something like £1.00 = $1.57, things can add up quickly! A £20 souvenir will cost you $31.21 plus whatever extra the bank charges for making the (fully electronic) currency exchange.
|(l-r, top to bottom) 1 penny, 2 pence, 5p|
10p, 20p, 50p
1 pound, 2 pound