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It can be difficult to make your money go far at the best of times, but even more so when you're on holiday. This is particularly the case given sterling's dramatic fall over the last year, which according to Santander UK means your pounds will be worth an average of 12.8% less in several holiday hotspots this summer. So how can you get more from your holiday money?
Santander found that holidaymakers are expecting to spend £757 on holiday this summer, yet this would have been worth an average of £868 when spending abroad a year ago. The biggest falls in sterling – and therefore the biggest loss of value – can be seen against the South African rand, with it falling by 24%, while against the Mexican peso and Thai baht, sterling is down by 16.3% and 16.2% respectively.
The pound is also worth 12% less in Eurozone countries than a year ago and has dropped by 13% against the US dollar, with the Turkish lira being the only currency in the 25 most popular overseas destinations against which sterling has risen over the last year (up by 5.5%).
This shows that you'll need to work hard to ensure your money goes as far as possible, and a lot of that comes down to the payment method you use, as well as how you use it.
The right payment method can make a significant difference to the interest rates you pay and the charges you could face, as Matt Hall, head of Banking and Unsecured Credit at Santander, explains:
"With the pound losing a significant amount of value on most popular currencies over the past year, holidaymakers' pockets are already stretched but, by using a cost-effective payment method, they can make sure they don't inadvertently throw more money away.
"We would advise everybody to spend a bit of time checking out any fees or charges before making a decision about how to pay for their holiday spending … It's important to remember to choose the local currency option when using your card abroad to make the most of these features."
Cash exchanged while in the UK is set to be the most popular payment method, accounting for 40% of overseas spending, while 22% will be on credit cards and 16% on debit cards. A further 7% of expenditure will be cash exchanged while abroad, with the same amount resulting from cash withdrawals made overseas.
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