The Salary Calculator

Travel money: Navigating exchange rates 

by Madaline Dunn

While we might be nearing the end of summer, it may be the case that you’ve not yet escaped for your summer holiday. After all, August is typically the most popular month for a getaway. If this is the case, or perhaps if you’re planning on taking an autumnal vacation abroad, it’s likely that exchange rates will be on your mind – or at least they should be.

Getting the most bang for your buck can really help you make the most of your getaway, and at The Salary Calculator, we’ll show you how.

Navigating foreign exchange rates

There are a total of 180 currencies that are recognised by the UN as legal tender, with the four most widely used being:

• The US dollar (USD),
• The Euro (EUR),
• The Japanese Yen (JPY) and
• Great British Pound (GBP).

They’re also fluctuating all the time, and different currency exchanges offer different rates. For this reason, it’s always important to see what’s out there depending on where you’re going and how much you’re looking to exchange.

The pound has seen some serious fluctuations in recent years, from the 31-year low following Brexit, hitting its lowest point against the US dollar since 1985, following the budget announcement by former Prime Minister Liz Truss and Chancellor Kwasi Kwarteng. However, 2023 is looking like the year the pound rebounds after ranking as one of the worst-performing currencies of 2022.

Right now, if you’re converting pounds into euro, one of the best rates for cash delivery for £500 is Eurochange, which offers 1 GBP = 1.149 EUR, or 1 EUR = 0.870 GBP. If you’re planning on travelling a little further afield to Australia, for example, and exchanging £400, Travel FX offers the best rates at 1 GBP = 1.886 AUD, or 1 AUD = 0.530 GBP. If you fancy trying some of the fancy Swiss chocolate in Switzerland, Currency Online Group is the right place for you to exchange £500, there you’ll get 1 GBP = 1.1063 CHF or 1 CHF = 0.904 GBP. Remember, this will differ depending on whether you get your money delivered or pick it up in person.

You can find out more about where you can find the best exchange rates by heading over here. 

Tips for getting the best rates and making your money go further

As we’ve noted, exchange rates vary widely depending on which currency exchange you choose and how much you’re exchanging, so in order to ensure you get the best rates, research is your best friend. Make sure to compare all different rates to ensure you get the most for your money.

According to Alon Rajic of MoneyTransferComparison, excessive exchange rate margins are still “very prevalent” among banks and some specialist providers. Indeed, Rajic noted that people still pay over a 5% markup on their currency exchanges – this, Rajic says, essentially removes benefiting from any of the “recent gains” made by the pound.

If using your card abroad, it’s also important to factor in foreign transaction fees. With foreign transaction fees, implemented by credit and debit card issuers and ATM networks, they are charged per transaction on purchases or withdrawals made overseas and vary between 2% to 3% of the purchase or withdrawal.

If you’re asking yourself whether using a cash machine abroad is better or worse than changing cash at the airport, we’re here to tell you that ATMs usually offer better exchange rates. The reason? Currency exchange stores and kiosks at the airports mark up the exchange rate for profit – so watch out! That said, you need to be wary because withdrawing cash from an ATM can see fees of almost 5%. It’s advised not to use Bank of Scotland, Lloyds Bank or TSB. These cards charge 50p to £1.50 for transactions on top of their normal exchange-rate charge, although spending euros in the EU, Iceland, Liechtenstein or Norway, is exempt.

Another thing to remember is to always choose to pay in local currency if using an overseas card.

It might also be worth getting a specialist travel credit or debit card, as this can give you ‘near-perfect’ exchange rates worldwide.

According to MoneySavingExpert, some of the best out there right now include:

• Barclaycard Rewards (top pick visa Credit card) – With this card you get interest-free withdrawals, and an ongoing 0.25% cashback.
• Chase (top pick Mastercard visa card) – This offers fee-free spending abroad and ATM withdrawals, and 1% cashback -although bear in mind that there’s a £1,500/month limit on ATM withdrawals.
• First Direct (top pick Mastercard debit card) -This offers fee-free spending abroad and ATM withdrawals, plus you’ll receive £175 if you switch over your existing bank account.

Finally, when researching, it’s advisable to look for a buy-back guarantee. This means that you’re guaranteed to keep the initial exchange rate, and there will also be no additional hidden costs.

Also, remember that if you use a bureau de change to exchange cash, and it goes bust while it has your money, you have no protection. A quick swap there and then is the best option to safeguard yourself against this potential risk.

Tags: Currency, foreign exchange rates, holiday money, holiday travel

Foreign exchange rates and their impact on goods and services in light of the pounds drop

by Madaline Dunn

In more bad news for the UK, last week, the pound fell again, following announcements by the Bank of England (BOE) that it would not extend emergency support. With the pound yo-yoing so dramatically many people are concerned about the wider impact of the pound’s drop in value and it’s likely you’ll have some questions.

At The Salary Calculator, we’ll walk you through:

• The current state of the pound
• What this means for consumers

The state of the pound

There are a number of different reasons behind the pound’s recent plummet, and although the new Prime Minister, Liz Truss, has been vocal about blaming the fallout from the Russia-Ukraine war, considerable blame rests with the announcement of the mini-budget.

As the news of Chancellor Kwasi Kwarteng’s economic plan spread, the pound dropped to record lows, and while it’s true to some extent, as Truss said, that “currencies are under pressure around the world,” the depreciation of the pound, to this extent, is unprecedented.

The pound fell sharply again after Andrew Bailey warned that the Bank of England would not extend its emergency intervention in financial markets. To help soften the blow, many had been advising Truss to do a complete U-turn on the mini-budget’s unfunded tax cuts – the International Monetary Fund, for example, stated that this would “change the trajectory” of interest rates. On Friday, it was announced by Truss that this U-turn would go ahead, alongside the firing of Kwarteng, which caused the pound to fluctuate once again.

What does the pound’s fall mean for consumers?

When it comes to the pound’s fall and its impact on exchange rates, consumers will feel the effect in that their money won’t go as far when paying for imported goods and services, such as oil. While oil has returned to pre-Ukraine war levels, due to oil being priced in dollars, for the time being, you’ll be paying more for topping up your car.

Speaking about oil’s price hike, Bestinvest’s Alice Haine says: “As with most major commodities, oil is priced in dollars which means filling up your car will be more expensive.” Adding: ‘The price consumers pay in the UK is still relatively high because of weakness in the pound.”

When it comes to food imports, while most people believe that around 50% of food is imported, some food analysts estimate that the UK actually imports much more, around 80% of its food. However, a significant portion of these food imports come from the EU, and considering, as Haine outlines, the Euro is down against the Dollar, the price increase will likely be less “dramatic” than oil’s price hike. That said, times will still be tough for importers, especially considering that the pound’s fall follows the challenges that came with Brexit, Covid, a global logistics crisis, rising energy bills and industrial action.

Although fewer people will be travelling abroad this Autumn/Winter, there are some that might be travelling for work or fancy a getaway when fewer people are holidaying. As an ABTA (Association of British Travel Agents) spokesperson told Euronews Travel, surprisingly, there’s still a lot of “pent up demand” for overseas travel after the last few years of travel restrictions, and due to customers deciding that holidays are “one of the last things they will cut back on when” looking to ease financial pressures. For those travelling within Europe, while activities and dining out won’t be affected as much, the plane ticket you purchase might be higher, due to aviation fuel and aircraft leases generally being priced in US dollars, and airlines outside the US having to pay more to refuel, something which is passed onto the customer. Travelling to the US, however, will be more expensive, as will trips to places such as Dubai and Barbados, as they also have their currencies pegged to the Dollar.

Tags: Bank of England, Economy, exchange rates, sterling

Foreign currency and exchange rates in 2022

by Madaline Dunn

After two years of lockdowns and travel restrictions, many will be looking at summer 2022 as the opportunity to finally escape and go on the holiday they’ve dreamt of for so long. That said, when it comes to travelling abroad, there’s a lot of factors to consider – one of them being foreign currency.

Perhaps you’re a little rusty when it comes to exchange rates, or maybe it’s the first time you’re leaving the country; after all, nearly a quarter of Brits have never been on a plane, and one in ten have never left the UK. Whatever the reason, if you’ve got questions about foreign currency, at The Salary Calculator, we’re here to answer all your burning questions. In this article, we’ll explain:

• How the pound is looking against the euro and the dollar
• Whether you should buy foreign currency in advance and what the risks are
• Top tips for securing the best exchange rate and avoiding charges

The pound versus the euro and the dollar

Exchange rates are in constant fluctuation, and a wide range of factors can affect them. Everything from political stability, interest rates and inflation to public debt, speculation and money supply can make a currency go up or down in value.

When it comes to the GBP/USD rate, over the last five years, it has been as high as $1.4328 and as low as $1.1492. That said, currently, the exchange rate is closer to the top-end of the trading range, and the higher it is, the cheaper it is to buy dollars with pounds.

Meanwhile, the GBP/ EUR rate, in 2021 and the beginning of 2022, has also been trading at the high end of its 5-year trading range.

Buying currency ahead of time: The advantages and risks

In some situations, when buying currency, it can be advantageous to plan ahead of time. In cases where you want to exchange large amounts of money, or you’re looking to purchase a currency that’s slightly more obscure than the euro or dollar where the exchange operator may have to order it in, buying in advance could be a good idea. That said, for ‘exotic currency,’ waiting until you arrive at your destination could be a better idea, as local rates are usually better.

You may also be thinking about buying your currency ahead of time in case the pound weakens. However, it’s important to keep your finger on the pulse when it comes to buying currency and check for updates on the exchange market. This can be done at XE.com, where you’ll be able to access live updates on the pound’s value against other currencies. Starting this research around a month before you’re due to head off is a wise idea. If, for example, you notice a trend of the rate steadily going down, buying then and there could help you get the most from your money. A safer bet, though, is to buy half of your travel money before and half later.

For trips where you’re unlikely to need to use cash, to avoid this altogether, it might be worth using a no foreign transaction fee travel card to pay for your purchases.

Tips for getting the best exchange rate and avoiding charges

There are some dos and don’ts when it comes to exchange rates and foreign currency, and below are some of our top tips.

Don’t buy currency at the airport

This is the number one way you will lose out when buying currency. Airport kiosks offer the worst holiday money exchange rates across the board, and they do this because they’re charging you for the convenience. If you’re up against time, or perhaps your trip is a spur of the moment escape, ordering your currency online and picking it up at the airport will help you avoid terrible exchange rates.

When abroad, pay in the local currency

Once you’ve flown to your holiday destination, make sure, when given the option, you choose to pay for purchases in the local currency. This will allow you to avoid both poor exchange rates and currency conversion fees.

Make sure to shop around

There are lots of foreign currency providers in the UK, so it’s worth comparing rates, even if the difference in exchange rates isn’t huge, you can still save a little.

Avoid using your credit or debit card for purchases abroad

When you use your card abroad, it’s likely your bank will charge you a non-sterling transaction fee (usually around 2-3%). Alongside this, you may be hit with additional fees for withdrawing cash and interest on top of the withdrawal. Some cards  charge between 50p and £1.50 for transactions on top of their normal exchange rate charge. Banks who are the culprits for this include Lloyds, TSB and Halifax.

Tags: exchange rates, Foreign Currency, holiday, holiday money

The salary calculator you need for Australia

by Admin

[Sponsored Post]

The idea of working in Australia is a dream for many Britons and a reality for many more. Naturally though, the employment system – and more importantly, the wage payment system – is not always the same as that in the UK. In some cases, it’s just a matter of terminology, but in other areas it is more substantial.

However, thanks to one of the most popular and trusted finance organisations in Australia, figuring out what you can expect in your pay packet when you work Down Under, has been made a whole lot easier.

The Industry Super group (more about them later) recently added a simple, reliable salary calculator to their website. Its simplicity reflects the streamlined wage system in Australia and takes into account current tax rates – including whether you’re a resident or a visitor – and the Medicare Levy, as well as providing an estimate of the minimum superannuation (pension) payment from an employer. Let’s look at this one first.

 Superannuation

In Australia, the two main sources of income an employee can expect in retirement are the government age pension (much like the UK State Pension) and payments from their ‘superannuation’ (similar to our occupational or personal pensions).

By law, all businesses must make contributions to their employees’ superannuation (pension) account. This is called the Superannuation Guarantee, and currently, employers must contribute at least 9.5% of an employee’s wage on top of their salary. It is compulsory and cannot be bargained out of.

The theory is that businesses make regular payments into the fund, and when it comes time to retire, the worker has a healthy nest egg waiting for them, since super can’t be touched early and all funds try and achieve a good return on investment for their account-holders.

Every full-time and part-time employee is eligible for super, as are casual workers who are 18 years or over and earning more than $450 in a single calendar month. (The same rules apply for casuals under 18 who work more than 30 hours per week). This means that even those on a working holiday can be entitled to super.

There are two main types of super fund in Australia.

‘Retail’ funds are those owned and managed by banks and other financial services companies.

‘Industry’ funds are member-owned super funds with profits going to members, and for the past decade have tended to outperform their retail counterparts (source: Money Management Australia). As the name implies, industry super funds were originally set up for workers in specific industries, however nowadays, almost all of them are open to anyone.  Industry Super is the peak body for industry funds in Australia.

Tax rates and brackets

Australia’s tax system is managed by the Australian Taxation Office, usually just called the ATO. It looks after all aspects of national tax and also manages employers’ Superannuation Guarantee compliance.

Tax rates vary as a person earns more. There are also different tax rates depending on whether you are an Australian resident, a foreign resident or there on a working holiday. Thankfully, the Industry Super salary calculator can be customised to take your specific circumstance into account by clicking the ‘Adjust your situation’ button.

Medicare

An amount under ‘Medicare Levy’ is included in calculations.

Like the NHS, Australia has a modern, reliable and highly-regarded public health system through its universal health care insurance scheme called ‘Medicare’ (not to be confused with the US ‘Medicare’)

Instead of being funded through regular taxation however, it is primarily subsidised through the Medicare Levy, which is added to a person’s annual tax bill each year, based on their income.

Non-residents and those on a working holiday are generally exempt from paying the Medicare Levy, and again, this is recognised by the customisable calculator, and shown when you choose the ‘View tax breakdown’ option.

Other factors

The calculator also takes into account certain tax offsets that the Australian Government offers to low and middle income-earners once they submit their annual tax return, and also offers suggestions on reducing annual tax by making voluntary contributions to superannuation.

Tags: ATO, Australia, Industry Super, medicare, salary calculator, super, superannuation

US Government shutdown

by Admin

I’m sure most people will have heard of the shutdown of the US Government which started on 1st October, due to a disagreement about whether or not to raise the “debt ceiling” (in short, the amount of money the government can borrow to pay for things it has already agreed to pay for). As a result of the shutdown a large number of government employees are on unpaid leave or working reduced hours and much government work is not being done.

One impact of this shutdown which may affect British tourists is that a large number of attractions are federally funded – that is, they are operated by the central US Government. An example of this is the National Park Service, which runs National Parks around the country. Since the shutdown began, all National Parks have been closed, preventing tourists from being able to visit. Some of these are what you might expect “Parks” to be, like the natural beauty at Yosemite, but others are famous monuments like the Statue of Liberty. Tourists are finding that even if they bought a ticket before the shutdown, on scheduled tours for places like the island of Alcatraz or Pearl Harbor, they have not been able to make the visit as planned.

For those who have booked a short holiday to the States, waiting until the shutdown reaches its conclusion and the parks reopen is not an option. If you find yourself in such a position, you can investigate other tourist attractions which may still be open. For example, while National Parks are closed, State Parks (those operated by the state they are in, rather than by the central government) remain open. I spoke to one couple who had planned to see the giant Californian redwoods at Muir Woods National Park – with the park closed they had to make new plans but were able to go instead to Armstrong Woods State Natural Reserve, which was open as usual, and see the trees they had hoped to see!

Tags: debt ceiling, holiday, National Park Service, NPS, tourism, US government shutdown, usa