Should you buy your holiday money now or after the general election?

BRITS going abroad this summer face the difficult decision of whether to buy their holiday money now or after the snap general election has taken place on June 8.

The pound rose after Prime Minister Theresa May made the surprise announcement last month, but it has slipped a little since then.

With the general election just a little over a month away, many have been left wondering what to do when it comes to holiday money.

Following the EU referendum last year, the pound has dropped by around 12 per cent against the euro and 17 per cent against the dollar, meaning British holidaymakers get around £70 less for every £500 changed into euros today and £104 fewer dollars.

Although the pound has risen since May's snap election announcement, it has only strengthened by around 1 per cent.

Today, you'll get 1.18 euros and 1.29 US dollars and for every £1.

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Should you buy your currency now or after June 8?

We spoke to some currency experts to get their view on what holidaymakers should do.

Richard Rawlinson, director of FX at Caxton, said that Theresa May’s snap election announcement last month set sterling rallying.

“This could be set to continue if she secures a stronger majority in the election, and consequently a stronger position from which to negotiate Brexit," he said.

SHOULD YOU GET A BUY BACK GUARANTEE?

IF you have leftover currency at the end of your holiday, some Forex firms will offer to buy back the remaining cash at the same exchange rate that you bought it for – without added commision.

Some firms offer a fee for doing this. Remember to compare rates, as they are usually a bit less generous and weigh up your options.

Make sure you ask to take out a buy back guarantee when you get your travel money.

“But these are unprecedented times and anything could happen, we should brace ourselves for further volatility and take precautions ahead of our holidays.

Ian Strafford-Taylor, CEO of travel money expert FairFX, said: “Any uncertainty surrounding political and economic events and announcements can have a negative impact on the pound and we’ve certainly seen that over the last 10 months.
“When the pound moves in your favour and you’re happy with the rate on offer, it’s often a good idea to buy your travel money to lock-in that rate and protect yourself from any future volatility.”

ALTERNATIVES TO HOLIDAY CASH

BEFORE you go on holiday, you can make sure you’re prepared to get the best rate.

A specialist credit card, such as the Creation Everyday or Halifax Clarity Mastercard, are a good way to secure the best rates and avoid paying fees.

You MUST remember to pay these off in full every month.

If you want to lock in a rate then you could get a pre-paid card from the likes of FairFX, Travelex or the Post Office.

Beware of fees, as some charge you for loading them with money, spending and withdrawing cash.

MoneySavingExpert.com recommends Mastercard’s Revolut, Weswap and Monzo – but check the terms and conditions of each card before applying.

Managing editor of money.co.uk, Martin Lane, thinks holidaymakers who are worried about the fluctuating pound should buy half their holiday money now and half closer to the time.

He said: “Trying to predict what will happen to the exchange rate is a mug’s game.

“You never know which way currency will go so if you have a holiday booked perhaps buying half now and half closer the time means you won’t feel so bitter if it doesn’t go in your favour.

How to get the best rate for holiday money

When buying currency, the best rates won’t necessarily come from your bank or even the Post Office or Marks & Spencer.

Use comparison tools like MoneySavingExpert’s TravelMoneyMax to compare, pick-up and pre-order rates.

It’s also worth checking out local independent bureaus on the high street near you.

Some bureaus offer preferential rates if you pre-order or print out a voucher to secure the online rate, rather than walking through the door.

If you need to get money at the last minute, order online or by phone and pick it up at the airport.

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