News: Press Releases:
Hold on to your
Euros
27 July 2005 British holidaymakers could save themselves
considerable hassle and lots of money if they spend time planning their annual
break and not leaving things to the last minute - a London firm of chartered
accountants has claimed.
"We all leave things to the last minute,"
said Steven Bruck, "but with a little planning you can save quite a lot of
money."
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The firm has come up with a number of
tips for holiday travellers that it believes will help them save money.
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- If you are likely to travel abroad more often,
obtain quotes for travel insurance to cover the whole year. This can be much
cheaper than arranging insurance for each trip individually.
- If you are travelling abroad by car make sure you
have comprehensive motor insurance. Once again it may be cheaper to arrange
full year cover if you are making multiple trips.
- Beware of the cost of using mobile phones abroad.
Various telephone companies offer calling cards, which provide cheaper calls
from abroad and some can be used from mobile phones, using a free phone
number.
- Obtain comparative costs for changing currency by
use of credit cards and debit cards with hole in the wall cash machines. These
can vary considerably in cost.
- Take copies of your credit cards and passport and
keep one copy at home and one with you. This could be invaluable in the case of
loss or theft.
- Make sure you are covered for household insurance
in the event of a longer stay away. Insurance policies can sometimes withdraw
cover in such cases.
- Make sure your passport has at least 6 months to
run. Some countries may restrict entry.
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It also pays to be careful when you
come back from holiday.
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- Check your credit card statements for accuracy and
that you have not been overcharged by the card company on conversion rates.
Don't forget that if you paid you paid for an item abroad, that proves to be
faulty when you get home, then it's probably covered by the purchase insurance
that is provided by your credit card company.
- If you have been on holiday outside the EU can you
claim back the foreign sales tax on any major purchases?
- If you were persuaded to buy that 'Spanish Villa'
while on the Costa-del-Sol, but it doesn't look quite so attractive now that
you have arrived back, don't forget that there is a 14-day cooling-off period,
during which to change your mind.
- Hold onto your Euros. Holiday makers could save
thousands of pounds by hanging on to their Euros; most banks don't charge
commission when changing the currency, which they originally sold, back to
pounds. This makes it appear worthwhile to change your leftover spending money
back it may not be. What many people fail to take into account is that
banks give back less pounds to you than you paid and the difference can be
quite significant. Also when you next buy currency you will have to pay
commission all over again.
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The difference between the price the bank
will pay when it sells you currency and the price it will pay when it buys it
back is known as the spread. If you consider the exchange rates offered by the
major banks for the Euro, the spread ranges from 9-10%.
Steven Bruck gave the following example:
"Consider a figure of £100 used towards buying Euros. £100 less the
original 2% commission (assuming enough currency was changed originally to
avoid the minimum charge) = £98. £98 would get you around 148 Euros
at the rates currently offered by the banks. If, on your return, you wanted to
change the 148 Euros back into sterling you would receive approx. £89. So
you are already £11 down. If you then changed this £89 back into
Euros for your next holiday you would receive 132 Euros losing another 14
Euros. The whole process of going from 148 Euros to 132 Euros represents an
avoidable loss of around 11%.
Steven says that fluctuating exchange rates
could affect this but in the current climate it is probably more likely that
the pound will drop against the Euro and either way, changing money back and
forth is still likely to cost more.
He added: "When you come back consider
holding onto your Euros, if you can afford to. Conventional wisdom suggests
that the Euro may strengthen further. In any event you can use them for a day
trip to Boulogne or a short European break, saving commission and the spread of
buying and selling currency."
For more information, or to set up an
interview, please call David Barzilay +44 (0)20 7544 8980, Lizzie Jordan +44
(0)20 7544 8827 or Steven Bruck +44 (0)20 7544 8970
EDITOR'S NOTE:
Blick Rothenberg's
client base includes a wide range of private sector companies in a variety of
industries as well as professional firms and charities. This breadth of
clientele means that they have practical experience of all accountancy issues
ranging from UK tax and audits to acquisitions, disposals of businesses and
international taxation. They also provide all-round taxation, accountancy and
other financial services to their personal client portfolio.
Blick
Rothenberg is authorised & regulated by the Financial Services Authority to
carry on investment business. |
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