■ Sterling’s fall to its lowest level against the euro in more than a year means that travel to the continent is getting more expensive — and the situation may worsen. At the end
of last year £1 got you €1.42, but this has fallen to about €1.30. The drop is a double whammy as it hits your spending power and is also likely to push up the prices of holidays.
■ Trips to the US are also more expensive as sterling has fallen below $1.40 for the first time since 2009. Uncertainty about Brexit means that the pound may lose more ground against both currencies before the referendum on June 23. To protect against falls you can lock in your travel money at today’s rates by topping up a prepaid currency card such as FairFX or CaxtonFX. Such cards are one of the best ways to spend money overseas and offer better rates than the banks.
■ For even more bang for your buck, consider an alternative destination. The value of the pound is soaring in some places, for example, sterling has risen 175 per cent against the Argentinian peso in the past three years. Russia, South Africa, Australia, Canada, Malaysia and Norway offer better value than they did three years ago.
■ If you’re buying property overseas, consider using a forward contract. These let you lock in an exchange rate for purchasing currency up to two years in the future by paying a deposit of 5 to 10 per cent. According to Andy Scott, an economist at HiFX, the foreign-exchange broker, the number of clients taking out these contracts has increased by 29 per cent. He says: “These are mainly Brits buying property in France and Spain looking to lock in the rates.” According to Jason Porter, a director at Blevins Franks, the financial-management company, the main benefit is security. “Knowing the cost in advance means volatility is removed and you know how much you need. If it happens that you secure a good rate, it’s a bonus.”
■ Those who are planning to buy a holiday home, retire in the sun or return funds to the UK can also save money by using a currency specialist rather than a high-street bank. They offer exchange rates that are typically 3 to 4 per cent more competitive, offering savings of up to £4,000 on a payment of £100,000. Transfer fees are also considerably lower.