A new Post Office Travel Money survey out last week found that most people think Spain is the holiday destination that offers the best value for money, followed by Greece, Bulgaria and Croatia. However, what the report didn’t say is that holidaymakers can make their pounds go further in any destination by shopping around for their foreign currency, and that the Post Office will almost certainly NOT offer them the best deal.
Whilst the Post Office is convenient for many, it offers a pretty poor exchange rate, so you could get far more euros, dollars or dirhams for your pounds elsewhere. For instance, doing a quick Google search this week, I found that for £500 I could get €554 at Debenhams, while at the Post Office I would get €3 less. If you’re going to Dubai, which the Post Office found only 38% of holidaymakers considers to good value, you’d get 2,286.70 UAE dirhams at Debenhams but only AED 2,244.50 at the Post Office. More foreign currency for your pounds means overseas destinations seem better value.
The Post Office does offer the advantage of being authorised by the FCA, so if you’re pre-ordering and paying online you have a good chance of getting your money back in the unlikely event that it goes bust, while many foreign exchange bureaux are registered with the FCA but not ‘authorised’, so they offer a lower level of protection.
However, there are several that offer good rates which are FCA-authorised. And of course, if you’re buying currency over the counter, you don’t need to worry anyway.
The best advice is always to shop around for currency and not stick to one foreign exchange bureau because they all offer different rates for different amounts and different currencies. A foreign exchange bureau that offers the best rate for euros might not offer such a good deal on dollars, for instance. Also, some offer better rates for higher amounts. As a general rule, if you’re buying more than £1,000 in foreign currency, you’ll get a better deal buying from an online foreign exchange outlet that charges a fee but offers a better rate of exchange than say a high street travel agent.
The best way to save money, however, is to invest in a currency card, such as Revolut. The best-performing currency cards will offer you better rates than foreign exchange bureau. For example, at the moment Revolut is offering an exchange rate of 1.1229 euros to the pound, so £500 would buy €561.45. If you were shopping in Dubai today, you’d get AED 4.66 to the pound, or 2,330 for £500, better even than Debenhams’ rate.
Other cards are available but they don’t all offer such a good deal and, in fact, some offer poor exchange rates. You can get more information about currency cards and how they work here. You can use them in ATMs to withdraw cash abroad, but you’ll probably still want to pre-purchase some currency before you leave the UK, in which case just remember to do this before you get to the airport, where foreign exchange bureaux offer the worst possible deal. Always.