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FOOL'S EYE VIEW
School holidays have finally arrived, and with them looms the prospect for many of finally being able to take that much longed-for summer holiday. Hurrah! I don't think there can be many people in the UK who don't look forward to taking their annual leave. In fact, the biggest cause of disputes over employment rights in the UK, as seen by the National Association of Citizens' Advice Bureaux is holiday entitlement. And although we may all believe that our four or five weeks' allocation each year has been our right since the beginning of time, it was, in actual fact only in 1998 that the Working Time Regulations decreed minimum annual leave provisions. Before this, no one had any right to paid holiday! What's more, your employer could, theoretically include Bank Holidays as part of your allowance. Eek! Of course, the worst bit about holidays has to be paying for them, although this doesn't seem to stop us from spending. A recent report from the Norwich and Peterborough BS has revealed that although just over half of us (52.6%) will spend up to £1,000 on a holiday, 44% (up from the 28.4% seen in 2000) will spend between £1,000 and £5,000; and 3% will spend even more than that! In fact, last year British holidaymakers spent a whopping £7.9bn abroad. And interestingly, the survey also found that we're not as credit hungry as you might think, as nearly two thirds of us (65%) use our savings to help pay for our holidays. Whatever your holiday plans, our Holidaymakers' Checklist can help you get organised, save money and generally have a better break! 1. Currency Exchange Rate Although many more of us have become more adventurous in our holiday destinations, recent research from Virgin Money has found that many of us still seem to prefer sun, sea and sand with nearly four in ten (38%) of us choosing the traditional beach holiday. And the shores of Europe seem to be preferable as only 28% choose a beach resort in the UK. Europe is, in fact, our holiday favourite with Euros making up two thirds of all travel money purchases (which may explain why many European destinations have become more expensive). However, this may not be the most cost effective move. A recent report from NatWest has pointed out that if we were to cash in the current strength of the pound, we could get more foreign currency for our sterling. Holidaymakers choosing to travel to Thailand, the US and South Africa could be gaining up to a fifth (20%) more currency for their pounds. Essentially, this means a family buying £1,000 worth of US dollars in 2000 could buy the same amount for just £859, saving £141. Travel to the Czech Republic, on the other hand would mean that you would pay 30% more for the same amount of Korunas as you would have received in 2000. Why not consider currency exchange rate when booking your trip abroad; not only could you benefit from a lucrative exchange rate, you could save on shopping and eating out whilst on vacation, too. If you need some inspiration regarding destinations, check out the BBC's holiday site and ABTA has links to specialist companies, too. 2. Foreign Currency/Traveller's Cheques Once you know the currency required you'll need to find the cheapest place to buy it. Foreign currency seems to be available everywhere, most notably at the airport, but never forget that convenience comes at a price. Not only will you undoubtedly suffer a poor exchange rate, you'll probably be charged a stonking commission too. After all, you're a captive audience. A far more Foolish solution is to have a think about what you'll need a week or two in advance and order it. Unless you're in the habit of booking your annual holiday a day in advance there's no excuse for not having enough time! Remember to note both the commission fees and the rate of exchange, so-called free commission often hides a dire exchange rate. Try asking the question "How many *Euros* (substitute with your required currency) will I get in exchange for £100, including charges" to help you compare deals. The Post Office and Marks & Spencer often offer competitive currency exchange rates on the High Street. However, my top tip is to check out Travelex, I've used their online service for my own holidays over the past two years and not only have I found them to offer the best exchange rate, their service is excellent too; so much so that I'm always recommending them to friends and colleagues. Plus, if you do find a cheaper alternative, their Price Promise means that they'll refund the difference. And as you collect your currency/travellers' cheques at the airport, there are no delivery fees either.And remember, you have to order online; Travelex prices at the airport are far more expensive. Watch out for cash handling fees! However, although most of us know never to buy foreign currency with our credit cards due to the fact it is treated as a cash advance, you should note that some banks treat their debit cards in the same way. Lloyds TSB, for example, will charge a 2% cash handling fee should you buy foreign currency online with its debit card. I've contacted Travelex about this who have explained that these fees are not under their control as they are charged by the banks themselves. It is believed that banks which provide Switch/Maestro cards (HSBC, NatWest) do not charge this fee. Ensure you check with your bank to find out its policy before you buy - if you will be charged a 2% fee it may be well worth buying your currency from the Post Office or Marks and Spencer instead! But the best way to obtain foreign currency cheaply is to open a Nationwide BS FlexAccount; it's the only current account which allows free ATM withdrawals, worldwide! You can apply for the Nationwide FlexAccount in our Banking Centre. 3. Health One thing you should never forget about is your health. Ensure you're properly prepared when travelling to the EU or Iceland, Liechtenstein, Norway or Switzerland by carrying a new E111 and CM1 form; this entitles UK citizens to free, or reduced cost medical treatment. They're free to pick up from the Post Office (don't forget to get them stamped) and many travel insurance providers insist their policyholders carry one. Ask your doctor at least six weeks in advance if there are any recommended vaccinations for your destination and remember to check the Foreign Office website for any travel restrictions before you go. 4. Travel Insurance And speaking of travel insurance, every holidaymaker should ensure they have adequate travel cover. If I told you that the treatment and repatriation costs for a skier with a broken leg, coming back from the US could be over £14,000, would this help to convince you? And apart from the health aspect, travel insurance will cover your possessions and provide personal liability and cancellation cover, too. If you shop around it is not too expensive; a family of four could buy two weeks European cover for just £36 with Debenhams. And a European annual policy would cost just £69 with Travsure (worldwide policies cost around £99) covering as many trips as you can take. Please don't settle for the policy your travel agent tries to flog you. Six out of ten of us still insist on buying this, but not only is it ridiculously expensive, this type of insurance is not even regulated by the FSA. Someone's making money somewhere and it's certainly not the consumer! Apply for a competitive travel insurance quote in our Insurance Centre. 5. Spending on Plastic Although we generally travel with at least some foreign currency/travellers' cheques, there's always a time when paying by card is simply more convenient. Hotel stays, car hire and restaurant bills are easy to cover with the plastic, and careful card use can be prudent when currency is running low (you can avoid changing more money up). However, you should realise that spending abroad on many credit cards is a rip-off as each transaction is bumped up by an unfair loading fee of around 2.75%. Recent research by Nationwide BS has found that UK holidaymakers could be wasting £750 million each year, simply by choosing expensive travel insurance and fee charging cards. Luckily, you can avoid these charges by choosing your card carefully. Financial products research company Defaqto has revealed that only two providers: Nationwide BS and Lombard Direct do not charge for transactions anywhere in the world. If you're happy with the credit card you've got and travel abroad more than once a year, taking out an additional card for holidays only could save you a packet in unfair fees. You can apply for the Nationwide BS Credit Card in our Credit Card Centre. 6. Parking Booking car parking online a few weeks in advance can save you a fortune in parking fees. You can do so in a matter of minutes through the BAA site. Alternatively, why not check out the local hotels and B&Bs to your airport, many offer special packages that include two weeks parking and can make catching a very early flight much easier. 7. Motoring If, however, you're planning to take your trusty vehicle with you on your travels, make sure you check the details of your insurance policy carefully. The AA has revealed that over a quarter of a million drivers will take to European roads this year, unaware that they are not fully insured. The AA recommends all drivers to take a copy of their insurance policy (insurers should be able to provide translations if required) as well as taking out European breakdown cover. Get a cheaper car insurance quotation in our Insurance Centre. 8. Don't forget your home Although you may be looking forward to your trip, don't forget to ensure your home and possessions will be safe while you're away. Bradford & Bingley gives the following tips to help ensure your peace of mind while away: 9. And if it all goes wrong? Unfortunately, not everyone will have holiday that they dreamed of as things can invariably go wrong. It's important to remember if you are travelling under a package deal to let your travel representative know as soon as possible about any problems you experience to allow them to try to sort them out. If travelling independently, let the hotel or company involved know, so they can take action. When booking a holiday it is well worth checking that the company is a member of ABTA (Association of British Travel Agents) as they can take action if you don't reach a suitable conclusion yourself, and provide compensation should your holiday firm goes bust. Independent travellers should ensure that firms used hold a Civil Aviation Authority (CAA) license known as an ATOL to provide protection should things go wrong. Most firms selling air travel are required to hold this license; essentially a protection scheme for flights and air holidays to prevent you from losing your money or being stranded abroad. Find out how to tell if you're covered at the CAA site. Remember to keep notes of all problems, backing them up with photographic evidence where appropriate and follow up all phone calls in writing. You can find a load more help regarding what to do if things go wrong at the Citizens' Advice Bureaux website. 10. Money And finally, remember to save up before you go and try not to overspend. A report from Clerical Medical has revealed that 20% of us have fallen out with our partner over their spending habits whilst abroad. Nearly 40% of those asked said it would take up to three months to pay off holiday costs, and a third said it would take them six. However a fifth admitted it could take them longer than six months to clear their deficit and a worrying ten per cent claimed it would take a whole year! The obvious thing to do therefore is try to put some money away each month into a holiday account. Set up a direct debit to leave your account when your salary goes in and watch your savings grow. And if you pick an account paying 5% AER you can rest assured that your money is working as hard as it can, too. Then try to stick to your holiday spending budget when you go! Find a savings account paying 5%AER or more in our Savings Centre. So there you have it, ten tips to help holidaymakers make the most of their breaks. Have a good trip!