Email subjects (as all headers in an email) do not accept HTML entities as used on a web page. Instead, they use several different encodings on non-ASCII data, all of which should be automatically applied by the mail gem.
As such, it it probably the easiest to just put the character directly into the subject variable without any additional encoding applied by yourself:
subject = "The amount of £#{@amount} has been sent to your account"
mail(:to => @email, :subject => subject, :reply_to => 'support@xyz.com')
Note that unless you use Ruby 2.0 (which defaults to utf-8 source encoding iirc), you probably have to put a magic encoding comment on top of your source file in order for ruby to interpret your source code as UTF-8 similar to this
# encoding: UTF-8