Millions of Britons heading overseas this Bank Holiday and summer will face higher holiday costs, as research carried out by foreign exchange specialist Moneycorp shows the Pound has lost value against almost 80% of the top global currencies in the past 12 months.
Moneycorp looked at how Sterling has fared against the 50 global currencies since last May. The research revealed that the Pound has weakened against 38 out of the 50 currencies in the past year.
What it means is that British holidaymakers heading to popular destinations such as Australia, the US and mainland Europe, will feel the financial pinch of the weaker buying power of the Pound this summer.
British holidaymakers will have to head much further afield, such as the Far East and South America, to get real value for money. The Pound has strengthened almost 15% against the Japanese Yen since last May. That means for every £500 converted into Japanese Yen, that’s an extra £74 compared to exchanging the same amount 12 months ago.
And Brits hoping to make their holiday money stretch further may want to consider South America, where the Pound is 11% stronger against the Argentinean Peso and 3% stronger against the Brazilian Real. With the Pound also strengthening against the Peso and Real between May 2011 and 2012, by 7.1% and 17.4% respectively, Sterling is 18.8% stronger than the Peso and 20.7% stronger than the Real compared to two years ago.
On the flip side of the coin: Australia has long been a favourite long-haul destination with the Brits, but the strength of the Australian Dollar is likely to have put off many holidaymakers this year. The buying power of the Pound Down Under has crumbled in the past four years, almost 30% weaker against the Australian Dollar (28.3%). Even in the past 12 months, Sterling has lost 4.7% of its value against the Australian Dollar.
Matthijs Boon, Moneycorp’s Director of Travel Money, comments: “The weak performance of Sterling over the past 12 months means our summer pounds aren’t going to stretch quite as far this year as they did last year.
“For more adventurous holidaymakers, one option to get better for money this summer is to look at long-haul destinations such as Argentina, South Africa and Brazil. However, cheaper destination costs will need to be weighed up against the higher price of flights to get there, when compared to hopping on a plane over to mainland Europe.”
Moneycorp tips to make your travel money stretch further this summer:
1/ If you haven’t booked your summer holidays yet, then consider picking a destination where the local currency has actually weakened against the Pound – there are some!
2/ Don’t use a credit card to withdraw money from an ATM abroad as you’ll be hit not just with the bank’s exchange rate, but also a foreign exchange fee and an ATM fee. Plus, the sum you take out will also start accruing interest immediately.
Instead, use a pre-paid currency card, such as Moneycorp’s Explorer card (which allows users to load up to 14 different currencies on one card). Because you load the card up before you leave, you won’t pay a foreign exchange fee when you withdraw cash from an ATM, and you’ll also get a better exchange rate.
Also, try to withdraw money from ATM machines in main banks rather than from machines in shops, as bank ATMs are less likely to charge withdrawal fees.
3/ Take a combination of cash and cards on holiday to cover the first few days of your holiday. It is worth having some cash for situations where a card isn’t accepted such as taking a taxi from the airport or tipping in restaurants.
4/ Order you travel money online to get the best exchange rates. You can then have the currency delivered to your home address or to a bureau at the airport you’re departing from. Moneycorp has bureaux at Gatwick, Stansted, Southampton & Southend Airports and throughout Central London.