The must-see countries that are much cheaper to visit post-Brexit
This weekend marks two years since the UK voted to leave the European Union - and with it the beginning of a bumpy ride for the wallets of British holidaymakers.
According to analysis by travel money experts FairFX, sterling is up as much as 70 per cent against some currencies, but remains 12 per cent down against the euro and 11 per cent down on the dollar compared to June 23, 2016, the day of the referendum.
“The past two years since the Brexit referendum have been eventful for the pound to say the least,” said FairFX CEO Ian Strafford-Taylor, who added there is likely to be more uncertainty for holidaymakers as the Government continues to navigate its way out of the EU.
He said, however, that holidaymakers are growing increasingly savvy in how they purchase their holiday money.
“As people become aware of the impact politics can have on currencies, we’re seeing an increasing number of people topping up their prepaid cards on a much more regular basis as and when the pound is performing well,” he said.
What’s happened to the pound?
Political and economic uncertainty has seen the pound swing up and down.
In June last year, holidaymakers were warned of dismal exchange rates, with some bureaux des changes selling as little as €0.90 for a pound. Airport branches were accused of “profiteering” and taking advantage of travellers, as the market rate was set much higher at €1.14.
Sterling has rallied somewhat after falling six per cent against the euro and eight against the dollar in the immediate aftermath of the referendum. But first it fell further - a flash crash in October and another slump in November saw the pound at the lowest rate against the euro since 2001, at €1.10.
The pound picked up in April to €1.15 and now sits at €1.14.
Across the Pond, the pound was worth $1.47 on the eve of the referendum, before falling to $1.32. In January 2017, sterling hit a 31-year low against the American currency, at $1.20, but the pound has rallied and today is up to €1.31.
In March this year, a money expert advised holidaymakers to purchase currency for their upcoming trips as the pound was unlikely to be in a better position.
Where should Britons head for a strong pound?
Compared to this time last year, the pound is up 72 per cent on the Argentine peso, meaning British travellers get an extra £420 for every £1,000 spent, thanks to a collapse in the nation’s currency.
Mexico, Brazil and World Cup host nation Russia are three more destinations where Britons are getting more bang for their buck, compared to June 2017, with the difference in 12 months 20 per cent, 18 per cent and 13 per cent, respectively.
This means football fans in Russia will receive around £118 more for every £1,000 worth of rubles exchanged.
Closer to home, British travellers will find better value in Iceland, where the pound is 11 per cent stronger against the Icelandic krona than it was this time last year, and Switzerland, where sterling is up seven per cent.
A positive exchange rate against the US dollar, many Caribbean destinations - the currencies of which are linked to the dollar - have become attractive destinations for UK travellers. The same is true of the Middle East.
A study by the Post Office in February found that sterling was performing well in eight out of 10 destinations compared to the same time in 2017. Turkey, Brazil and Indonesia were among some of the countries where the pound had done best in the last 12 months.
However, it remained down on a number of European countries, including Poland, Croatia and those in the Eurozone.
How to get the best for your money?
Our consumer travel expert Nick Trend offers five tips to take away with you this summer.
1. Avoid airports
Do not rely on buying currency at the airport. You are part of a captive market. Rates are rarely competitive with those available on the high street.
2. Use credit cards, but carefully
Generally, paying by credit card gives you a better rate than paying by debit card or cash. But this advice doesn’t apply if you are not able to clear the balance each month. The interest you pay on that balance will only add to your costs.
3. Consider a currency card
Get a competitive bank or currency card. The best pre-paid varieties now offer excellent value. I use the Monzo card (monzo.com) which charges no fees (up to a limit), offers near “perfect” exchange rates (ie you aren’t stung by the difference between a buy and sell rate) and allows you to always keep the balance in sterling without having to convert into a specific currency in advance. Alternatively the Halifax Clarity card is one of the best value credit cards for using overseas (halifax.co.uk/travel).
4. Lean towards the local currency
If you are offered the choice between paying a card bill in sterling or the local currency, opt for the local currency. This option is being offered more and more often - both at restaurants, shops and hotels, and at cash points. It is highly unlikely that the vendor or their bank will offer you a rate on sterling which is better than you will get automatically from the card issuer.
5. Hold on to your cash
If travelling to the eurozone, or another country that you visit regularly, keep some cash in hand and take it home with you so that you have a small float to take with you next time you visit.
