Holidays take a pounding for one in five as sterling slides

Nearly one in five (19%) would be holiday-makers have given up on a foreign holiday this year due to the continuing weakness of the pound, according to findings from independent market research firm Consumer Intelligence.

A nationwide survey showed a major shift in holiday intentions driven by the slide of sterling with just 37% of holidaymakers saying the drop in the pound has had no impact on them. Around 29% say they will spend less on foreign holidays while another 15% are booking cheaper trips to compensate for the weakness of the pound.

However, around 13% of those planning to go overseas say they have stocked up on foreign currency in advance to safeguard against any further possible loss in value. Around a quarter of them (26%) do not expect to use the cash for six months or more.

Poor economic news has meant the pound has lost around five per cent of its value against most major currencies so far in 2013 making holidays more expensive and the expectation is that the pound could fall further on fears of recession.

Consumer Intelligence is warning anyone buying foreign exchange – and particularly those buying in advance – to think carefully about how they buy their money.

David Black of Consumer Intelligence said: “The plummeting value of sterling over the last few months has significantly increased the cost of foreign trips and it is clearly having an impact on people’s holiday plans.

“Many are cutting back because of affordability and many are simply giving up. Those who are planning ahead and buying currency may benefit but it is important to get the best possible deal when every pound – no matter how weak – counts.”

Anyone planning to get foreign currency should search around for the best exchange rate. While most outlets proudly say ‘commission free’ exchange there can be a big difference between the actual exchange rates and what they’re offering.

Holidaymakers should also work out the best method to pay for goods and services overseas. There is a choice of cash, credit cards, debit cards, prepaid cards and travellers’ cheques. Anyone using a credit or debit card should, if possible, look for one that does not levy additional charges on transactions in foreign currencies.

However, do remember that when you’re buying goods or services valued between £100 and £30,000, either at home or abroad, then you have more protection if you use a credit card. This is because of Section 75 of the Consumer Credit Act which makes the credit card provider jointly liable if the goods or services are faulty or not supplied.

The best credit cards for overseas purchases include Halifax’s Clarity, Metro Bank Credit Card, Post Office Platinum, Nationwide Select Credit (which is only available to its current account customers), Saga Platinum and Aqua Advance.

Debit cards to use include those from the current accounts operated by Norwich and Peterborough Building Society, Cumberland Building Society and Metro Bank. Top picks in terms of prepaid cards are FairFX and CaxtonFX.