Poor Exchange Rate Maths Costs UK Travellers £288 Million
More than a third of adults are unable to convert currency 44 per cent don’t work out how much things cost when shopping abroad Countdown maths expert, Rachel Riley, provides currency conversion tips and calculations

More than a third of UK adults (38 per cent) are unable to convert popular currencies into sterling1 and are losing out on a staggering £288 million2 a year on holiday as a result.

Despite household budgets being squeezed, a new report3 by the Post Office® reveals that 44 per cent of people don’t work out how much things actually cost when they are abroad and one in three people (27 per cent) go over budget when they travel.

Such is our dislike for exchange rate maths, one in five people (17 per cent) prefer holidaying in places where they understand the currency, and nearly 1.5 million people actually avoid places with unfamiliar currency because they find it too confusing and stressful to work out how much they are spending.

Despite Turkey’s growing popularity as a holiday destination, the Turkish lira topped the list of confusing currencies, 49 per cent of people were unable to convert it into sterling. And a surprising number of people struggled to convert the most popular and widely used currencies – 35 per cent did not convert US dollars accurately and 26 per cent struggled with the euro.

Rachel Riley, Countdown’s new resident maths expert said: “Working out how much things cost on holiday doesn’t have to be time consuming or confusing.
To help avoid overspending, make a note of the exchange rate when you buy your currency and use my easy to remember formulae for working out some of the most popular currencies.

“It’s not always practical to carry a calculator around but most mobile phones have calculator functions, so make the most of this, particularly if buying expensive items, and work out how much you are spending before you purchase.”

Rachel Riley’s Currency Conversion Formulae (based on rates XX June 2009)

Currency | Method | Formula
—————-+——————————+———————————-
Euro | The current euro exchange | Take One Tenth Off For Sterling
| rate is around 1.09 so the |
| easiest way to work this |
| out in pounds is to take |
| away 1/10 of the price in |
| euros. |
—————-+——————————+———————————-
US dollar | For current US dollar | Double Dollars Then Take A T
| exchange rate is 1.56 so | hird
| doubling the number of |
| dollars and dividing by 3 |
| gets you to sterling. |
—————-+——————————+———————————-
Turkish lira | For the Turkish Lira it is | Lira Times Two Times Two, Then
| around 2.4 which is | Divide By Ten
| approximately multiplying |
| by 4 (or doubling twice) |
| and then dividing by 10. |
—————-+——————————+———————————-
Thai baht | For Thai baht it’s 51.8 to | Doubling Your Baht Equals Price
| the pound so doubling this | In Pennies!
| is approximately the price |
| in pence. |
—————-+——————————+———————————-
Egyptian | The Egyptian pound is 8.2 | Halve Once, Twice,Thrice,In,E
pound | to the British pound so | gypt!
| halving the number of |
| Egyptian pounds 3 times is |
| the easiest way to work |
| that out. |

Sarah Munro, head of Post Office Travel Services added: “At a time where budgets are being stretched, it’s more important than ever to keep a reign on holiday spending. To make the most of your pound make sure you do your research before you go. Check out the exchange rate and do some research to find out how much things basic staples like drinks and suncream will cost when you get there.

Sarah continued: “Make sure you buy commission-free currency in advance and avoid purchasing it at airports where you won’t get the best rates and can be charged through the nose in commission; recent research shows that we waste £20 million a year by purchasing money at airports4. It is also advisable not to withdraw money abroad at ATMs as you will be charged and it can be difficult to keep tabs on your spending.”

Top Tips from Rachel Riley and the Post Office for budgeting on holiday:

Make a note of the exchange rate – it sounds simple but many of us change our money and then forget the rate we bought it at. Keep a note in your purse or wallet and use this as your reference when working out how much things cost. Write the equivalents for £1, £5, £10 and so on and use as a rough reference guide Use your phone – make the most of the portable calculator that most of us have in our mobile phones, if you are struggling to work something out, you can do it quickly on your phone. For those who want something more advanced, you can buy special currency converters and calculators

Don’t pay in sterling– don’t be tempted to pay in sterling on your card or in cash as shops and restaurants can charge their own exchange rate which is unlikely to be competitive. You can also get stung by added fees of up to 4 per cent. Bartering – in lots of popular destinations like Turkey and Morocco, bartering is part of the culture. Do your research before you go and if you’re going somewhere where bartering is acceptable, don’t be afraid to offer the merchant the price that you are willing to pay Try a pre-paid travel card – pre-paid cards like the Post Office Travel Money Card enable you to load your card with currency when the exchange rate is good. You can then use this as you would your bank card and it helps act as your own budgeting tool to ensure you don’t spend more than you have loaded onto the card. The Travel Money Card is completely separate from your bank account too so it’s a secure way of taking money abroad.

Over 1,600 Post Office bureau de change branches offer the most widely requested European currencies on demand (except the Hungarian forint and Estonian kroon, which can be pre-ordered).

All currencies can be pre-ordered for next day branch collection at all 11,500 Post Office outlets or online at postoffice.co.uk. Home delivery can also be requested online. Travellers to the eurozone can obtain euro currency over the counter at more than 8,000 Post Office branches.

1 Respondents were asked to convert euro, US dollar, Egyptian pound, Thai baht and Turkish lira into pound sterling
2 Figure based on the finding that 25 per cent of the population over-spends on holiday through miscalculating prices by an average of £24 3All research unless stated otherwise is from Opinium Research. Opinium Research carried out an online poll of 2,022 British adults from Friday 12th to Tuesday 16th June 2009. Results have been weighted to nationally representative criteria. www.opinium.co.uk 4With an estimated 2.6 million UK airport transactions made annually, the volume of euro transactions was based on 80 per cent of outbound travel being to Europe, cross-referenced with the Post Office’s own statistics which show that euro sales account for 70 per cent of currency purchases.

That lower figures of 70 per cent was therefore used to calculate euro wastage. The figure of £20, 329,400 was calculated by combining the minimum commission charge of £3 with the difference between the euro exchange rate in UK airports and that at Post Office branches. An individual wastage of £11.17 per transaction was multiplied by 1.82m transactions (70 per cent of total transactions of 2.6m). The exchange rate differential was calculated by taking the mean average from cost comparisons at eight UK airports on three separate days.

• what about NAREI.com? About a year and a half ago, i was sitting...
• Washed out by the Canuks! I'd recently put a bit of money into Canadian Royalty...
• How To Reduce A Trillion Dollar Deficit Stanford professor John Taylor had an alarming op-ed piece in...

Tags: British Pound, Economy, Exchange rate, Financial News, Money, Post Office, The Post Office, Travel, Travel Money Card

• Young people believe UK living standards won’t recover for a decade
• Next generation to reform borrowing habits

Young people look set to bear the scars of the current recession for years to come judging by their pessimistic outlook for economic recovery, new research published today by Post Office Financial Services reveals.

However, having been forced to learn financial lessons the hard way, the next generation of adults believe they are far more likely to take on a more responsible approach to credit and spending.

Almost a quarter (24 per cent) of 18 to 24 year-olds believe that living standards will take over a decade to return to pre-recession levels. A further third (34 per cent) predict that economic recovery is more than five years away.

These results reveal a younger generation more pessimistic about the timescale for economic recovery than any other age group. By contrast, just five per cent of 45-54 year-olds thought that recession would last longer than a decade; perhaps indicative of those who have lived through the last recession feeling more optimistic about recovery from the current downturn.

Credit-crunched young people have also learned some serious financial lessons as a result of the recession, and to a much greater extent than in older age groups. This is particularly apparent when it comes to borrowing:
· Half of young people (48 per cent) believe they will reduce their usage of credit as a result of the crunch
· This trend is less apparent among older age groups, with a significantly lower 28 per cent of 35-44 year-olds planning to reform their use of credit

Doug Strachan, head of consumer insight at Post Office Financial Services said: “These findings demonstrate that the recession is already causing a marked change in the attitudes and the potential behaviour of the younger generation in particular.

“Younger age groups have only ever known relative economic good times during their adult lives, so the change in economic climate is therefore likely to hit these groups the hardest, contributing to this overwhelming sense of pessimism. One positive result of this appears to be indications of a desire to change financial habits drastically in the long term.”

The credit crunch has also impacted young adults (18-24s) in the following ways:
· More than twice as likely to have borrowed money from a friend (12 per cent) than older age groups;
· 11 per cent cite the decision to put off getting married or starting a family as a direct result of the current economic climate, more than twice the level of any other age group;
· Their greatest fear is the risk of losing their job, this is in line with older age groups; for a third (32 per cent) losing their job is something they are extremely concerned about. Overall, 70 per cent of under-24s are concerned about becoming unemployed.

Notes to Editors:

For further information or additional data from the Post Office Financial Services People’s Panel, please contact:

Blue Rubicon Post Office Press Office
Helen Searle/ Kate Cozens Hayley Fowell
020 7260 2700 020 7250 2417
helen.searle@bluerubicon.com  hayley.fowell@royalmail.com
kate.cozens@bluerubicon.com

About the Post Office Financial Services People’s Panel:

Research conducted by T-Poll on behalf of the Post Office People’s Panel during late March 2009. A nationally representative sample of the UK was used. In total, 1,541 consumers were surveyed online.

Research conducted by T-Poll on behalf of the Post Office People’s Panel during September 2008. A nationally representative sample of the UK was used. In total, 1,984 consumers were surveyed online.

The Post Office Panel is a specially recruited group of consumers, nearly all of whom are Post Office customers. They provide regular and in-depth consumer insight into spending patterns and trends within the UK to the Post Office. The Post Office Panel is comprised, in part, of some of the 24 million customers who use the Post Office each week and reflects every social demographic within the UK, as Post Office customers do.

• Melco PBL Losses Narrows Thanks to Crown Macau Melco PBL Entertainment Ltd., a developer and owner of casinos...
• Smart Choices And Savings When Considering Life Insurance. Guest post by Charan Singh Every month almost one million...
• Considering Office Furniture Nowadays, everything in the world is done for people and...

Tags: Financial News, Post Office, Savings, The Post Office

Savers with large amounts of cash on deposit should take action now to protect their money as the credit crunch threatens to sink more banks.

The Financial Services Compensation Scheme (FSCS) underwrites a £35,000 per person per bank repayment guarantee in the event of a crisis.

On the face of it, the FSCS pays out if savers have up to £35,000 squirreled away in a savings account – but rules for receiving compensation are not as straightforward as they seem.

Reading the small print reveals the rules actually say that if a saver has up to £35,000 on deposit in any number of accounts at the same bank, only the first £35,000 of the total amount is protected

Those at particular risk are savers with personal, partnership and business accounts with the same banking groups

FSCS is triggered if a bank, building society or credit union cannot settle or is unlikely to settle claims from savers – providing the institution is authorised under a banking licence in the UK.

The problem is many banks are groups operating on one licence, and although savers may feel their money is safe, they are at real risk of losing a lot of money if the banking group collapses.

In the current dog-eat-dog world of banking, a saver may unwittingly have cash outside FSCS due to a take-over or merger, even though they may know about the scheme’s shortcomings and have already taken action to protect their cash.

Here’s a list of the main banks and financial institution groups that operate under umbrella licenses:

· LloydsTSB, The AA, Bank of Scotland, Halifax, Birmingham Midshires, Intelligent Finance, Saga, Cheltenham and Gloucester

· Nationwide, Cheshire and Derbyshire Building Societies

· Barclays and the Woolwich

· Royal Bank of Scotland and Direct Line

· Clydesdale and Yorkshire Bank

· The Post Office and Bank of Ireland

· Co-op and Smile

· Abbey, Cahoot, Alliance and Leicester and Bradford and Bingley savings accounts

Under FSCS rules, if you have more than £35,000 in a single name or joint names in any of these groups, then disperse the money straight away in to sums of less than £35,000 at banks and building societies operating under separate licenses.

Most other big players like HSBC hold individual banking licenses.

Keep an eye on any cash you may have with the Alliance and Leicester – the Abbey recently swallowed the bank and at the moment they are trading on separate licenses, but this may change at short notice.

The FSCS raises money for compensation from a levy paid by member financial institutions.

Chancellor Alistair Darling has hinted that the £35,000 FSCS limit may go up to £50,000 in the near future.

Banks outside the UK

By law, overseas financial institutions should request Financial Services Authority permission before they open for business in the UK.

Many of these firms are not covered by the FSCS and savers should carefully check the firm’s terms and conditions before depositing money, however good the deal may seem.

The Post Office bank looks a good safe bet for savers as trading is under the same licence as the Bank of Ireland. The Irish government has recently announced all Irish banks are covered by a 100% compensation guarantee.

For all the best deals on Current bank account, Business bank accounts, Savings and Mortgage deals visit the number one Independent Bank Compassion site Bank—Accounts

• Peer to Peer Lending Review One of the side effects of the atrocious market we...
• 7 Banks Offering Signup-Bonuses for Online Savings and Checking Accounts Looking for a new checking or savings account?  Unhappy with...
• Stashing Your Cash If you want to access your money quickly, where do...

Tags: Abbey, Alliance and Leicester, Bank of Ireland, Bank of Scotland, Barclays, Birmingham Midshires, Bradford and Bingley, Cahoot, Cheltenham and Gloucester, Cheshire, Clydesdale, Co-op, Derbyshire Building Societies, Direct Line, Halifax, Intelligent Finance, LloydsTSB, Nationwide, Recession, Royal Bank of Scotland, Saga, Savings, savings accounts, Smile, The AA, The Post Office, the Woolwich, Yorkshire Bank