The British pound sign cannot be expressed in ASCII, but is very common in the works of English novelists. It evolved as a stylized version of the letter L (from the Latin "Librii"), and it's entirely appropriate to represent it as such, either like:
The horse cost L8 12s. 6d. or The horse cost 8l. 12s. 6d.
This works particularly well where an amount is expressed in pounds, shillings and pence (Librii, soldarii, denarii).
Where there is a simple number of pounds, you may prefer just to use the word:
She was a handsome widow with 500 pounds a year.