holiday

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.

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Wednesday, March 9th, 2022 Foreign Currency No Comments

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

Travel insurance tips this summer

by Madaline Dunn

As the summer goes on and more places open up, the prospect of finally going on holiday is incredibly exciting. That said, with policies around travel changing all the time, it’s also understandable to feel concerned that things might not go according to plan.

At The Salary Calculator, we’ll make sure that you’re all clued up when it comes to travel insurance this summer so that you can take a vacation stress-free.

This article will walk you through:

  • What should you look for when choosing travel insurance?
  • What situations are not covered by travel insurance?
  • What happens if you catch Covid?
  • What happens if the NHS app pings you?

What to look for when choosing travel insurance

Luckily, more providers are now offering covid-related travel insurance after initially distancing themselves. Now, there’s a wide range of providers to choose from, but there are a few different aspects to look out for when making your decision.

When searching for travel insurance, ask yourself:

  • Does the provider offer coverage if I test positive for Covid?
  • Does the provider offer curtailment cover?
  • Does the provider offer coverage if I lose a loved one due to Covid?
  • Does the provider offer coverage if I miss my flight because my required Covid test has not returned results in time for my getaway?
  • Does the provider offer medical cover if I fall ill with Covid?
  • Does the provider offer protection from the Foreign, Commonwealth and Development Office (FCDO) travel advice changes?

Equally, to ensure that covid doesn’t catch you out, it’s best to keep updated with any rule changes and travel guidance. So, before booking a holiday, it’s wise to check in with the UK’s traffic light system.

It’s also important to remember that just because a country is on the UK’s green list, you may not be allowed entry as a holidaymaker. Checking the Foreign Office website and checking in with a country’s UK embassy website will keep you in the loop.

When am I not covered?

There are some situations where your travel insurance won’t offer coverage. If the FCDO changes its travel advice to warn against all travel, holiday providers will likely cancel and refund your trip. That said, while policy providers covered cancellation based on FCDO advice before the pandemic, now fewer policy providers are doing so. This will vary depending on your provider, so it’s important to check the details.

Also, be wary of accepting vouchers or Refund Credit Notes (RCN) from airline and holiday companies for cancellations. If you do, you can’t claim from your travel insurance cover as this is viewed as a double claim.

Additionally, you won’t be covered for ‘disinclination to travel’, which essentially means you have personally made the decision not to travel. So, for example, if you’re due to travel but hear that pandemic cases are rising in the area you are staying, you no longer wish to travel and cancel your holiday, you won’t be covered. Equally, if your hotel informs you that some of its facilities will be closed due to Covid, and as a result, you no longer wish to travel and cancel your holiday, you won’t be covered here either.

Am I covered if I catch Covid?

While coverage will vary from provider to provider, there are quite a few out there that offer Coronavirus trip cancellation cover. So, if you or a household member falls ill with Covid within 14 days of your holiday, and you have to cancel, you will be covered.

Some providers offering this coverage include:

  • Co-op
  • Asda
  • Nationwide
  • JustTravelCover
  • Staysure

Likewise, if you have booked activities for when you are on holiday, and they are disrupted due to Covid, there is Coronavirus excursions cancellation coverage.

What happens if I’m pinged

Recently, more and more people are being ‘pinged’ by the NHS app. So much so, the phenomenon has been dubbed the ‘Pingdemic,’ with record numbers reaching 689,313 in one day at the end of July.

So, it’s understandable to be concerned that your holiday may be jeopardised by coming into contact with someone who has tested positive for the virus.

If you do find yourself pinged before you set out on holiday, you should identify whether or not the Test and Trace service is instructing you to isolate. While you do not legally have to isolate yourself if you have not received instruction, it is advised to do so. Subsequently, most providers will offer cover for ‘advised’ isolation. Staysure, for example, offers cancellation cover if you are unable to travel due to receiving contact from Test and Trace.

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Friday, August 13th, 2021 Insurance No Comments

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!

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Friday, October 11th, 2013 Economy, Foreign Currency No Comments

US tax can be complicated for same-sex couples

by Admin

I was in the USA recently and was interested to see an article in the newspaper USA Today reporting that same-sex couples sometimes face extra difficulties when it comes to paying their taxes. In the US, although there is an equivalent to PAYE (where your employer deducts your tax for you), almost all taxpayers complete a tax return detailing their income, allowable deductions, and the tax they should pay. This might be more or less than what your employer deducted, so you may have to pay the difference or request a refund.

The problem for same-sex couples occurs because of two details of the American tax / legal system. Firstly, married couples can file a joint tax return, rather than filing two separate returns. Filing a return can be a laborious process, and sometimes it is necessary to pay a tax consultant to complete it for you, so filing only one can save time and money. Sometimes, filing a joint return actually leads to less tax being owed, an obvious benefit. Secondly, same-sex marriage is not recognised by the federal government (i.e. the country) but is recognised by some states (e.g. Massachusetts). What this all adds up to is same-sex couples having to file different tax returns at the state and federal levels – a joint return for their state (if it allows them to submit joint returns) and separate returns for the federal government. This can cost couples more in tax consultant fees (as there are more forms to submit) and can cost them more in tax as they miss out on the tax benefits of being a married couple.

At the moment it doesn’t appear that this problem is going to go away – not soon, in any case. You can learn more about US Federal Income Tax on the US Salary Calculator.

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Sunday, February 26th, 2012 Foreign Currency, Income Tax No Comments

Holidaying in an overdrawn country

by Admin

I’m in Greece at the moment, a country which has been suffering recently from severe economic problems. Over the past decade the government has taken advantage of the security of being part of the Euro and borrowed more than the country’s total annual revenue. The downturn lead to less advantageous borrowing rates, leaving the country with an increasingly difficult task to repay the loans (sounds like the “sub-prime” crisis but for countries rather than homeowners, doesn’t it?). Cuts in public sector pay and benefits have lead to protests and riots. So does this affect you if you’re visiting the country?

My experience is no. The weakened Euro has helped increase the number of visitors to Greece and its islands, where I am right now. Hotels and restaurants therefore are not short of customers and although I have seen a number of closed establishments, such businesses can fail even in boom times. Prices for meals and drinks remain reasonable – no sign of businesses using inflation to combat financial problems. There have also been no effects of any strikes, although if you were to be relying on public transport you may run out of luck (I have had no problem using the buses here, however).

The holiday resorts, bars, shops and tourist attractions have been as busy as ever and it doesn’t appear that the larger economic problems of the country are having an impact on the day-to-day experiences of a tourist enjoying the hospitality of a popular holiday destination.

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Monday, July 5th, 2010 Economy, Foreign Currency No Comments

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