On June 23 2016 the UK voted to leave the European Union.
One year later, the pound has dived by 13.7 per cent against the euro and experts warn of more volatility ahead.
It’s left many British travellers out of pocket when buying currency for summer holidays to Europe in 2017.
But there are still many ways to secure the best exchange rate and make your pound stretch further, regardless of the destination.
International payments company Caxton has revealed its expert tips for buying travel money one year on from the crucial Brexit vote.
Alexandra Russell-Oliver, Currency Market Analyst at Caxton, said: “British holidaymakers need to continue to be careful.
Brexit: How to use the weak pound to your holiday advantage one year on
Ongoing risks to the pound such as political uncertainty and Brexit negotiations could see the pound weaken
“We’ll likely see further volatility this year. Ongoing risks to the pound such as political uncertainty and Brexit negotiations could see the pound weaken.
“However, looking further ahead, we could see some uplift if there are signs that the UK might pursue a softer Brexit.”
Here are Caxton’s top tips to drive down the cost of your holiday.
Use a prepaid card
Prepaid cards are a great way to get the most out of your holiday money. Not only do they tend to offer great exchange rates and few, if any, charges when spending abroad, they also allow holidaymakers to pre-load exactly how much they want to spend, meaning you are less likely to blow your budget.
For example, the Caxton prepaid card does not charge you for using ATMs abroad, which could save you an average of £3 per cash withdrawal compared to your debit card.
Brexit: Experts recommend avoiding airport exchange bureaus at all costs
Avoid airport currency bureaus at all costs
Always avoid airport bureaus for exchanging money since you are bound to get stung. The bureaus have captive markets in the airport, leaving them free to offer travellers terrible rates coupled with high commission.
Make sure you plan ahead to avoid this. Even if the rate is just two per cent higher, this could see you lose as much as £40 on the average family’s holiday spending budget.
Watch the rates to take advantage of gains
Brushing up on how currency markets work will help you to make informed decisions and understand what makes a good exchange rate for your holiday currency. It may also be worth keeping an eye on big economic events, since they can significantly influence the strength of a currency.
Keep up to date with current affairs and check the news headlines – if you see reports of the pound strengthening, it’s probably worth booking some holiday money.
Brexit: Always pay in the local currency rather than pound sterling if given the option
Hedge your bets
Consider playing it safe. You can hedge your bets by exchanging half your currency now, half later. This can be done easily by locking in a rate on a prepaid currency card.
That way, whether the rate goes in your favour or against you, you’ll benefit from the higher exchange rate on at least half of your spending money.
Always pay in the local currency
If you are using a debit, credit or pre-paid card when travelling abroad, always be sure to pay in the local currency if you are given the choice. People mistakenly believe that they should opt to pay in pounds. However, by paying in sterling the money will actually be converted twice, resulting in extra charges.
In some cases this could be as much as £6 per transaction, which quickly adds up over the course of a holiday.