Whether you’re jet-setting all year round or about to embark on a summer family break, we’ve rounded up the money-saving tips you need to know to keep costs down
Escaping reality by jetting off on holiday is the perfect way to relax, but these trips can often end up being costly affairs.
To help you cut costs, Moneywise lets you in on its holiday saving hacks. From the cheapest ways to spend abroad to how to avoid airline extras – we’ve got your trip covered.
Avoid airline extras
British Airways and Virgin Atlantic have cut their fares by no longer offering a free checked luggage allowance for their cheapest flights, and on budget airlines you can usually save on your ticket by just carrying hand luggage on board.
Each airline has different rules about bag sizes and weights, so you should find out what these are well before you need to pack – it can be cheaper to buy a new smaller suitcase, or pay in advance to check your bag in, rather than get hit with fees for exceeding the limits at the airport.
Don’t forget, too, that airports in the UK won’t allow any cosmetics or liquids over 100ml in your hand luggage. So either decant your sun cream into a smaller bottle, pack it in any checked bags, or buy it once you’ve gone through security.
And if you’re heading to the airport, the sooner you book your parking or train ticket, the cheaper it will be.
Get insured
Once you’ve booked your trip, get holiday cover straight away. If you need to cancel before your departure date or the airline you’ve booked with goes bust, you won’t be able to make a claim if you’ve got no insurance.
Use an online price comparison website to find the best deal for your needs, but look beyond the cost. Generally, you should only consider policies that include £2 million for medical expenses, £1 million for personal liability, £3,000 for cancellation, £1,500 for baggage and £250 for cash – and watch out for exclusions.
If you think you’ll be going away more than once in 12 months, it’s often cheaper to get an annual insurance policy rather than one for each trip.
Don’t forget, also, to get a free EHIC (European Health Insurance Card) via NHS.uk as well as travel insurance if you’re going to Europe. Without one, your insurer might reject any medical claims you make if you’re ill or injured. You shouldn’t pay for these cards, so avoid any service that tries to charge you. Go to Ehic.org.uk, which takes you to the relevant NHS page.
"A specialist debit or credit card could be the best way to spend"
Have you got your visas sorted?
Many countries require you to buy an entrance visa in advance, and these can take some time to come through. So find out what you need as soon as you can, otherwise you could be turned away at the airport and waste all the cash you’ve spent on flights and more. And ensure you buy these via official channels, as copycat sites will rip you off.
While you’re at it, check your passport is still valid. There’s a premium to pay if you need to renew one in under six weeks.
Use a specialist credit or debit card
A third of holidaymakers withdraw cash when they get to their destination, according to currency card WeSwap – and that could cost them as much as 5%, if not more.
This is down to extra charges added by most banks. You could be hit with a load fee, which is an extra cost to the exchange rate in the bank’s favour, and some providers also levy a flat charge each time you use your card abroad. See the table below for the full list of offenders.
What the big banks charge for using their standard-account debit cards abroad
| Bank | Load fee (added to exchange rate) | Penalty charge (added each time you spend) | ATM fee (added if you withdraw cash) | Cost to spend £50 | Cost to withdraw £50 |
|---|---|---|---|---|---|
| Barclays | 2.75% | N/A | £1.50 | £1.38 | £2.88 |
| Halifax | 2.99% | 50p | £1.50 | £2 | £3 |
| Lloyds | 2.99% | 50p | £1.50 | £2 | £3 |
| Nationwide | 2% | N/A | £1 | £1 | £2 |
| NatWest | 2.75% (min £1) | N/A | 2% (min £2, max £5) | £1.38 | £3.38 |
| Santander | 2.25% | £1.25 | 1.5% (min £1.99) | £2.38 | £3.12 |
| TSB | 2.99% | £1 | 1.5% (min £2, max £4.50) | £2.50 | £3.50 |
Source: Moneywise, 14 May 2018
But using cards isn’t a bad thing. In fact, if you get a specialist debit or credit card to use on your holiday it could be the best way to spend, saving you money by giving you near-perfect exchange rates.
Barclaycard, Halifax, and Santander all offer travel-friendly credit cards with zero fees, though you do need to pay the balance off in full each month to avoid interest charges. With the Halifax Clarity and Santander Zero credit cards you also get charged daily interest on cash withdrawals, so the sooner you clear the card the better.
If you’d rather open a new current account, challenger banks Monzo and Starling also allow to you to spend abroad for free. Both are app-only banks, so you’ll need a smartphone to open an account. See the table (below) for more information.
How much the best debit and credit cards charge for making purchases and withdrawing cash abroad
| Bank | Load fee (added to exchange rate) | Penalty charge (added each time you spend) | ATM fee (added if you withdraw cash) | Cost to spend £50 | Cost to withdraw £50 |
|---|---|---|---|---|---|
| Halifax Clarity credit card | 0% | 0% | 0%, but 18.9%* added in interest until paid off | £0 | 79p** |
| Barclaycard Platinum Travel credit card | 0%*** | 0%*** | 0%*** | £0 | £0 |
| Santander Zero credit card | 0% | 0% | 0%, but 18.9% added in interest until paid off | £0 | £0 |
| Starling Bank debit card | 0% | 0% | 0% | £0 | £0 |
| Monzo debit card | 0% | 0% | 0% for first £200 a month, then 3% | £0 | £0 |
* At least 51% of applicants will get this rate. ** If interest is charged for 30 days.
*** Until 31 August 2022, then it changes to 2.99%. Source: Moneywise, 14 May 2018.
If you are paying by card when abroad, you might be asked if you want to pay in pounds. Always say no and pay in the local currency. This way you’ll pay the rate set in the UK, not the one in the country you’re visiting, which will probably be higher.
With confusing exchange rates it’s sometimes a pain to work out how much you are spending. The app XE can instantly convert the local prices to pounds, so you’ve a reasonable idea if you’re keeping to budget. Don’t forget that you might have to add sales tax to the prices you see.
Don’t forget a little holiday cash
Of course, even with one of the top overseas spending cards, it’s always a good idea to take a little cash with you. But leave this currency conversion until you reach the airport and you’ll pay well over the odds.
And don’t assume that just because the bureau de change or bank declares “0% commission” that you’re getting a bargain. There will still be charges added via the exchange rate, which can be at whatever rate they choose to set it. Instead, use a comparison site, such as Travelmoneymax.com, to find the best rate near you for collection or delivery of your dinars, dollars or dong.
Beat phone bill shocks
New rules introduced last summer mean you can finally roam for free with your mobile minutes, texts and data in the EU as well as in Iceland, Liechtenstein and Norway.
But if you’re travelling elsewhere in the world you can still be hit with a nasty bill if you use your phone as normal. And don’t think that just by avoiding using your phone you’ll be OK. Even if you don’t open up an app, it’s possible for data to be eaten up in the background as apps search for updates or push through notifications.
You’ve a couple of options to avoid this happening. You can turn off background app refresh (iOS) or restrict background data (Android) for a selected app or all apps. Easier still, if you can stick to free wi-fi in your hotel, then turn off the phone’s mobile data before you get on the plane or ferry.
"You can finally roam for free with your mobile in the EU"
Or if you do think you’ll need more access, check what add-on data bundles your network provides. These aren’t necessarily cheap, but they will cost a lot less than paying the roaming rates.
Also check if your mobile provider allows free roaming outside the EU – all the major networks offer it in some form, although the countries vary by provider. Three has the most comprehensive coverage, followed by Vodafone, but it is only available on Three’s Advanced plans and Vodafone’s non-basic plans.
Check too that you won’t be charged every time a call goes to voicemail. The easiest solution is to ask your network to turn off this function while you are away.
Not booked your flight or hotel yet?
Even though the majority of summer holidays are booked in January, you can still bag a late bargain break with these tricks.
1. Open the incognito (or private) mode on your web browser. This can stop companies increasing prices based on your browsing history or even the type of computer you are using. Then fire up a comparison site such as SkyScanner to find the cheapest flights, and Kayak for hotels.
2. Calculate whether buying your flights and hotels separately works out cheaper than a package holiday.
3. Try to be flexible with the dates you are away. You’ll get cheaper flights if you avoid Fridays and Sundays, while hotel rooms located in business districts can cost less at weekends.
4. You’ll often be able to pay less for flights that aren’t direct, especially long haul. If you can stop over for a few days on the way, you’ll also get to see a different place – such as a break in Reykyavik on the way to New York.
5. Check if you can book hotels and flights via cashback sites such as Quidco and TopCashback for up to 10% extra savings.
ANDY WEBB contributes to BBC 1’s Rip Off Britain and Right On The Money and blogs on his own website, Be Clever With Your Cash
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