The falling Pound Sterling: Tips for travellers

Bad news for the outbound traveller from the UK.

© Shutterstock

Falling Pound Sterling

Bad news for the outbound traveller from the UK.

© Shutterstock

http://www.falstaff.com/en/nd/the-falling-pound-sterling-tips-for-travellers/ The falling Pound Sterling: Tips for travellers The words of 1967 British Prime Minister Harold Wilson are returning to haunt the UK. http://www.falstaff.com/fileadmin/_processed_/5/1/csm_Pound_Sterling_falling_shutterstock_e189df58c9.jpg

Back on the 19th November 1967, British Prime Minister Harold Wilson claimed that “the pound in your pocket is safe”. In that year, Britain suffered a balance of payments crisis (it was spending/importing more than it was earning/exporting, and the Pound Sterling was under threat of becoming unaffordable and too strong. In that month, it was devalued by 14.3% against the dollar.

The opposite is true today. The pound has lost its value due to a number of current UK domestic influences, the main reason being the tax cuts and spending measures in the UK Chancellor of the Exchequer, Kwasi Kwarteng’s recent “mini-budget”. At one point, the pound was worth only $1.03 in value, with some currency exchange bureaus in airports actually at or below parity for a short spell. And the bad news for UK travellers is that it may drop further in the coming months.

Precautions you can take

However, while this is good news for the inbound tourist to the UK, it is certainly not good news for the outbound traveller from the UK, where many destinations exchange in US dollars.

To take the best advantage of the current exchange rates, travellers need to be aware of a few precautions they can take:

  • Outbound UK travellers should take care when booking anything on dollar-only sites as a result of exchange rates (for example Barbados and the Bahamas trade in dollars).
  • Destination hotels often provide very poor exchange rates.
  • Do not purchase your foreign currency at port exchange bureaus – they are notoriously expensive despite seemingly ‘free’ transaction charges.
  • The weaker pound will more than likely push up travel costs where the pricing of fuel in dollars .
  • When using your credit or debit card abroad ask for the bill in local currency.
  • Consider using a trustworthy internet-only mobile bank account – many offer up to £500/$500 free of exchange rate/transaction fee charges as an incentive.
  • Use an affiliate ATM for your domestic bank at your destination for currency exchange (although do check in advance for any fees your domestic card issuer may charge)
  • Check the rates locally before travelling – you may get a better deal on currency at your local bank branch.
  • Online click and collect can be more economical. However, some bureaus suspend this service when a currency is targeted, and there can be delivery charges if you decide to have your currency home-delivered.
  • Be aware that international travel and hospitality providing comparison websites can increase their prices, meaning you might actually get a better deal through direct contact with the destination.
  • Try and take a no-foreign-fee debit or credit card with you. But don’t use your credit card for a cash advance.
  • Traveller’s checks are no longer the viable option they once were. They are now simply an inconvenient form of low-security cash, but with added fees.
  • Homework and planning before you purchase currency is the best advice – it’s just an internet search away to obtain the best live deal.