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Money: 9 top tips to save while you’re on holiday

Cost of living crisis People cool off at the Mediterranean Sea on La Malagueta beach on a hot summer day in Malaga, Spain, July 9, 2022. REUTERS/Jon Nazca
Cost of living crisis: Going on holidays abroad doesn't need to be expensive. Photo: Jon Nazca/Reuters (Jon Nazca / reuters)

Many are struggling to afford a holiday at the moment as UK households continue to struggle with the rising cost of living.

But there are ways to keep costs down while on holiday so that you can enjoy the summer abroad.

Here are consumer group Which?'s nine top tips for how to slash hundreds of pounds from the cost of going on holiday.

1. Pay in local currency and use the right card

Travellers paying by debit card should always pay in the local currency, rather than converting the transaction to GBP (pound sterling), to avoid being hit with worse exchange rates.

You should also check to see if your bank charges a fee to use cards abroad. More expensive cards add a fixed fee, which could be around £1.50 or 2.95%, per transaction on debit card payments and cash withdrawals in a foreign currency (excluding ATMs in Spain).

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Some cards offer fee-free purchases, but will still charge extra to take money out at a cash point overseas.

Read more: Cost of living crisis: 12 top tips to save money during the summer holiday

Starling Bank and Monzo debit cards offer fee-free overseas purchases and ATM withdrawals when using your debit card abroad — however, Monzo may charge fees on ATM withdrawals depending on what kind of account you have, and where you’re travelling.

If you opt for a travel credit card, Halifax Clarity, Barclaycard Rewards and Virgin Money Travel credit cards work out cheapest — plus you have additional Section 75 protection if something goes wrong.

2. Don’t exchange money at the airport

Preparing and packing for a holiday can be a stressful business, but travellers shouldn’t leave getting their travel money until the last minute.

Which? found that changing money at the airport could cost much more than using a competitive high street outlet.

Airport bureaux de change rarely offer the best currency exchange rates as they have a "captive audience" of holidaymakers.

A bus drives past a board indicating exchange currencies between the Sterling and the US Dollar and Euros, in Central London on April 22, 2022. - The pound slumped more than one percent against the dollar on April 22, 2022 after official data showed tumbling retail sales as Britons grapple with a cost-of-living crisis. In London morning deals, sterling sank to $1.2887 -- its lowest level since October 2020, also as Britain's Prime Minister comes under renewed political pressure. (Photo by Tolga Akmen / AFP) (Photo by TOLGA AKMEN/AFP via Getty Images)
It’s worth comparing the deals on offer from several companies before changing your money. Photo: Tolga Akmen/AFP via Getty (TOLGA AKMEN via Getty Images)

3. Shop around for currency

Bureaux de change offer different money exchange rates and charging structures.

Some also impose a fee for buying foreign currency — so it is important to consider the total cost of changing cash before handing it over.

Which? recommends asking exactly how much foreign currency you will get from each outlet in return for the pounds sterling you are seeking to exchange.

It’s worth comparing the deals on offer from several companies before changing your money, and you may also want to steer clear of high street banks.

Read more: Cost of living: Top tips to save money on a UK staycation

Which? research found that banks typically fail to offer the best exchange rates and may only offer currency exchange services to existing customers.

4. Be aware of data roaming charges

Since Brexit, many providers have removed the provision for free roaming in the EU and the cost can vary between different networks.

Be sure to check what charges you’ll now face for using your phone data abroad to avoid any unwanted bills. Also, find out if you have any roaming ‘add-ons’ tied to your bill.

There are still some providers that allow users to use their UK bundle at no extra cost, including Giffgaff (capped at 5GB for EU roaming), O2, Smarty and Virgin Mobile — so if you’re looking for a new mobile provider, it is worth checking the roaming policy on offer.

Happy family ride in the car
if you’re planning to travel during a peak time, it’s especially important that you book your car hire as early as possible. Photo: Getty (Solovyova via Getty Images)

5. Book car hire in advance…

Which? Travel experts would usually recommend booking your car hire two months in advance of your trip.

However, due to increased demand in recent months, brokers have ramped up their prices meaning that the later customers book, the more they’ll pay.

So, if you’re planning to travel during a peak time, it’s especially important that you book your car hire as early as possible.

Customers should also avoid "pay on arrival" options, as some unscrupulous companies could choose to cancel and take a more valuable booking as rates rise. With this in mind, it is worth "locking in" a deal by paying when booking, either by paying in full or choosing a company that takes a deposit and guarantees the booking price.

6… and watch out for pricey extras

If hiring a car while abroad, be wary of companies charging over the odds for extras such as sat navs.

Instead, Which? suggests downloading a free app, such as Navmii, before travelling, which can access maps offline.

Child car seats are also a pricey extra, so it is worth bringing your own where possible. Some airlines, including Jet2 and easyJet, allow passengers to take a child car seat for free, so it is worth checking in advance.

Group of friends sitting around banquet table set for dinner outside in field under tree server pouring water
When working out holiday budgets it is worth factoring in tipping, especially if you're traveling to a country where it is expected. Photo: Getty (Thomas Barwick via Getty Images)

7. Factor tipping costs into your budget

When working out holiday budgets it is worth factoring in tipping, especially if visiting the USA where the going rate is 15%-20%.

Dine in New York and a three-course meal for two people with wine will cost, on average, £74, with a tip being an extra £15. Bar staff also expect a tip of $1-$2 (75p-£1.50) per drink, so costs can soon add up.

8. Find the best price for insurance

To find the best price for travel insurance, Which? experts suggest using several price comparison websites to view the biggest range of policies and prices.

Travellers should carefully consider their requirements and the protections they need before taking out a policy as there can be major differences between them, for example, some won’t include any cancellation cover, or offer protection for baggage or belongings.

Read more: Cost of living crisis: Top tips to save money when travelling

Which? recommends travellers take out an insurance policy that includes at least £5m emergency medical cover, £1m personal liability cover, £2,000 cancellation, curtailment and missed departure cover (or the value of the trip), and £1,500 personal belongings and money cover.

9. Compare prices before booking airport transfers

It is worth comparing the price of transfers from the airport in advance to get the best deal.

Generally, getting an unbooked taxi on arrival will be more expensive than booking transport in advance.

Skyscanner provides pre-book prices of private taxis, shared shuttle buses and coaches, as does GoCompare, HolidayTaxis and Hoppa. Travellers can enter the details of their arrival airport, destination, date, time and party size, and will be given a list of what’s available.

Which? Travel previously used Skyscanner and saved €31 on the standard price of €104 on a taxi from Malaga Airport in Spain to a hotel in Estepona. It would have been an extra €29 cheaper to take a shared shuttle.

Watch: Airline refunds: What are your rights as a consumer?