There's one key thing that going on holiday requires – spending money. While you may not want to spend a fortune, you still need to pay for your food and drink, and what about the excursions, museum trips and all-important souvenirs? You'll need a bit of financial input if you want to make your holiday one to remember, and even though you'll probably want a bit of cash, you should never leave for the airport without your trusty travel credit card in tow.
Getting ready for that all-important summer break requires a lot of planning, and once you've decided what to pack, have arranged travel insurance and organised your itinerary, your thoughts will probably turn to holiday money. But how can you make sure you get the best rates?
The fall in sterling may be having an impact on the value of the pound in your pocket, but happily, it isn't putting people off from taking that much-needed break.
Research from Sainsbury's Travel Insurance & Travel Money shows that 75% of respondents are planning a holiday in the UK this year – the same as a year ago – while 66% are planning overseas holidays, barely changed from last year's survey, when 67% were planning to jet off to foreign soil. This shows clear resilience in the overseas holiday market, said the report, despite the cost of holiday spending money having increased for British tourists.
Many will have already booked their main holiday for 2017, too: 23% expected to book by the end of 2016, and a further 12% intend to do so this month, with these early birds clearly liking having something to look forward to in the winter months (it can be a great way to beat the January blues, after all).
But just where will they be going, and how much could it all cost? Well, beach holidays are the most popular choice of overseas trip (30%), followed by city breaks (19%) and cruises (7%), while those favouring a UK destination will be heading on a city break (29%), beach trip (13%), walking holiday (10%) or spa break (7%).
Many are cost-conscious when it comes to their travels, as although 17% will go despite worrying about the cost, 16% are specifically choosing a UK holiday to keep costs down, while 15% will stick to a strict budget and 14% will go on the most purse-friendly holiday possible. Even so, 2017's holidaymakers plan to spend an average of £816 per person on the holiday alone, and that's before add-ons and spending money is taken into account.
The sheer cost involved means it's vital to take out the right kind of travel insurance, yet this is often something that gets pushed to the bottom of the to-do list. Indeed, 6% say they'll buy their travel insurance within the last week of going on holiday, while 1% will leave it until the day of departure, and 18% said they don't plan to get cover for their trip at all.
This could be an expensive mistake. Most policies have some form of cancellation cover that starts from the day you take out the policy, explains Sainsbury's Bank, so if you don't have insurance, you wouldn't be protected should you have to cancel your trip for some unforeseen reason – which could mean that £816 is wasted.
"Whilst lots of holidaymakers are early bookers who like to plan ahead so they have something to look forward to, our research shows that many of them don't pay the same attention when it comes to travel insurance," said Alan Sanderson, head of Insurance at Sainsbury's Bank. "Also if you're booking independently rather than through a travel agent, make sure your policy provides good quality independent traveller cover, as you may not benefit from protection under the ATOL scheme."
When you're planning a holiday, you probably focus on the basic costs involved, such as the cost of the holiday itself, spending money, transport and travel insurance. But what about those unexpected costs? It's always wise to plan ahead and factor a few mishaps into your holiday budget, because if not, you could have a rather hefty bill on your hands.
Research from Satsuma shows that the average holidaymaker saves £460 for spending money, but they don't always factor in the extra costs involved in travelling. For example, 26% find they have to pay extra to use wi-fi at their chosen hotel and 15% are even charged for air conditioning, while 19% are hit with excessive luggage charges before they've even left UK soil.
Other issues that can cost you dearly include unexpectedly being charged tourist tax at the end of a stay (something that's impacted 43% of travellers), having expensive liquids taken from your hand luggage (25%), charges for not printing your boarding card or staying too long in the car park (both 5%), lost luggage (14%), being charged to bring back items (3%) and even the hotel not having a record of your booking (7%), double booking (6%) or not accepting your booking (5%), all of which could mean you end up spending far more than you bargained for.
Indeed, the research shows that the true cost of a holiday can far exceed initial expectations: the average cost of a holiday package among respondents stood at £713.16, with spending money coming in at £458.70, but that's where many people stop calculating.
They often forget to think about things like transport (which can cost an average of £155.98), upgrades (£98.73), pet care (£86.70), clothes for their children (£84.96) and themselves (£80.62), airport parking (£62.80), childcare (£51.91) and house care (£51.66), and some even forget to factor in the cost of travel insurance (£70.07).
As a result, your bargain family holiday could actually cost the best part of £2,000, and that's before those "mishap" expenses have been accounted for. So make sure you plan ahead! That means saving as much as possible for your well-earned trip, making sure to factor a contingency fund into proceedings, so you've got enough to cover every eventuality. You may want to do that by taking the "little and often" mantra – even small amounts saved on a regular basis can soon add up, so perhaps opt for an easy access savings account or even a regular saver version to make the most of your funds.
Don't forget about travel insurance, either. This is one expense that should never be scrimped on, but that doesn't mean you want to spend a fortune – use our travel insurance quote tool to get the cover you need at a price you can afford, and that way, you can tick one thing off your list well in advance of your holiday, and feel prepared for any mishaps that could come your way.
When you're planning that all-important holiday, sorting out your travel money should be high on the list of priorities. After all, why spend all that time sourcing the best hotel deals and cut-price flights, only to let your hard work go to waste with a poor exchange rate? Here are a few top tips on how you can find the best exchange rate and get more bang for your buck (or euro/peso/dirham…).
Exchange rates constantly fluctuate, so it can be difficult to know when's the best time to make your move and buy your currency. That's why it's important to be ahead of the game – start watching the rates at least a month ahead of your holiday so you can get a feel of when would be a good time to buy, i.e. when the pound is strong enough against your chosen currency so you can get the most euros or dollars (etc.) for your sterling. Many things can impact this, such as economic forecasts, employment figures and wider interest rates, not to mention continued uncertainty surrounding Brexit, so keeping tabs on things is a must.
Currency exchange can be confusing at the best of times, but if you familiarise yourself with the jargon, it could be a bit simpler to understand. For example, you'll want to know the difference between the sell rate (what you get when you exchange your pounds for new currency) and the buy rate (what you get back when you exchange any leftover foreign currency), both of which are vital to bear in mind when you're comparing exchange rates.
Not only do exchange rates fluctuate on a day-to-day basis, but they also vary between providers, which means it's vital to shop around and compare exchange rates before you make your decision. This means you'll want to head online to compare providers – don't just rely on the Post Office, travel agents or your usual provider, but do a whole of market comparison to get a thorough idea of what's out there.
There are various online tools available that can help you do just that – much like if you're looking to transfer a large amount of money overseas, in which case seeking an international money transfer service is essential – and remember to never leave it until the last minute.
Buying your currency at the airport is a complete no no as you'll get the worst possible rates, so save yourself some cash by comparing exchange rates and buying your currency in advance. This means you're far more likely to get a better deal as you're giving yourself time to compare the options, and if you're buying online, you'll need to order your currency early enough to get it delivered. Which brings us to…
The days of needing to buy your currency on the high street are long gone. Nowadays, you can often get far better exchange rates by heading to a specialist online provider, which is why it's so important to shop around in advance – if you plan ahead you'll be able to order your currency online and arrange to have it delivered (or even choose to pick it up in store), and can often find far better deals.
While having a bit of cash when you're abroad will be vital, you probably won't want to carry around huge wads of it. That's where travel credit cards come in. As long as you've got a specialist option, you needn't worry about foreign usage fees and can often enjoy great exchange rates, together with added security. Just remember to always pay for items in the local currency to avoid being hit with a dynamic currency conversion rate; this is something that businesses will apply to convert your purchase into sterling, so it's best to avoid it.
Alternatively, if you don't want to use credit, what about a prepaid travel card? Again, you'll get the security of plastic but needn't worry about getting into debt, as you can only spend what you pre-loaded onto the card.
8th May 2019
As the Bank Holiday weekend draws near, many holidaymakers will be looking to use the break for a trip abroad – so now is the perfect time to revisit their financial checklist to see if they have everything organised.
As the Bank Holiday weekend draws near, many holidaymakers will be looking to use the break for a trip abroad – so now is the perfect time to revisit their...
25th March 2019
Don't be caught out by overseas card charges