It wasn't until we reviewed our bank statement after a recent wedding in the UK that we realised just how weak the British Pound is against the Euro. Great for us living in Luxembourg with debts in the UK, but for any of the 5 million Britons planning to escape the never ending winter in Blighty they can expect a bit of a shock if they venture to Euroland this Easter.
One Euro will now cost 81p compared to just 70p this time last year. That means your holiday will be nearly 16% more expensive than in 2007, assuming Euro prices have stayed the same.
Don't be put off
To keep costs down, try and avoid paying any commission when buying your currency.
Lloyds TSB, the Post Office and Marks & Spencer are among the high street options that don't charge, but it's worth checking and comparing their exchange rates to make sure you get the best deal. You may find that the rates offered by 'Commission free' deals are so bad you might be better off paying the commission for a better rate!
Travelex promises to offer the best rate to those buying online or refund the difference, and there's no commission charged http://www.travelex.co.uk/uk/.
Consider buying online. Most online companies do not charge commission and will deliver to your home, your work, or you can collect your currency at the airport.
Buy high/Sell low
This is a catchy phrase that's useful when determining which of the prices quoted by an exchange dealer is the one you will get. The general rule is that you will get the worst option!
Take for instance the following rates that you might expect to be quoted when buying currency:
"We sell: GBPEUR 0.80"
"We buy: GBPEUR 0.75"
From your point of view however:
One Euro will now cost 81p compared to just 70p this time last year. That means your holiday will be nearly 16% more expensive than in 2007, assuming Euro prices have stayed the same.
Don't be put off
To keep costs down, try and avoid paying any commission when buying your currency.
Lloyds TSB, the Post Office and Marks & Spencer are among the high street options that don't charge, but it's worth checking and comparing their exchange rates to make sure you get the best deal. You may find that the rates offered by 'Commission free' deals are so bad you might be better off paying the commission for a better rate!
Travelex promises to offer the best rate to those buying online or refund the difference, and there's no commission charged http://www.travelex.co.uk/uk/.
Consider buying online. Most online companies do not charge commission and will deliver to your home, your work, or you can collect your currency at the airport.
Buy high/Sell low
This is a catchy phrase that's useful when determining which of the prices quoted by an exchange dealer is the one you will get. The general rule is that you will get the worst option!
Take for instance the following rates that you might expect to be quoted when buying currency:
"We sell: GBPEUR 0.80"
"We buy: GBPEUR 0.75"
From your point of view however:
- If you are buying Euro you will have to buy at the highest price ie you'll pay 80p per Euro
- If you are selling Euro you will have to sell at the lowest price ie you'll get 75p per Euro
Thus, if you bought EUR 1,000 it would cost you GBP 800, and if you sold them straight back again you would only get GBP 750.
Commission
Commission may be charged in addition at a flat rate of a graded rate. This is worth considering, because if you are exchanging large sums of money a flat rate may be a better option.
Also, if you're travelling with a group, consider making one combined currency purchase to minimise the additional charges.
Come prepared
Don't leave buying your currency until you get to the airport, you won't get the best rate and you will pay commission. Not only that, but they may not have the amount (or even any) or the currency you want.
Mix and match
It's best to take a mixture of cash, debit and credit cards when going on holiday. Most cards add on 2.75% for use abroad and you may find yourself paying as much as £4.75 for every £100 withdrawn, so limit the number of times you take cash out and don't withdraw small amounts as flat rates may apply.
Cards are of course a smart option to limit the risk of losing cash - make sure you get travel insurance to soften the blow of this unpleasant situation.
Bon voyage
You just have to look at the headlines to know how fluid and unpredictable the exchange markets can be. There's nothing we can do about it, so I say pack your bags and get away from it all, just bear in mind the above tips to help keep costs down as much as possible.
Enjoy.........
