Brexit: how to manage your holiday spending

Summer at ocean beach with two chairs and umbrellaWhile it’s still not fully clear how our money will be affected by Brexit, one area where we are likely to notice a difference in our pockets is around holiday spending this summer.

Since the referendum result, exchange rates have dropped against both the dollar and euro. What this means is that you’re now likely to get less dollars or euros than you would have last year. At its highest point in the last year, you would have been able to exchange £100 for €143, whereas now you’ll get €119. Likewise with the dollar, at its highest point in the last year, you would have gotten $157 for £100, $26 more than £100 would get you today.

While your pounds may not go as far as they would have last year, there are some savvy ways of getting the most from your money with some simple preparation and smart decisions.

When to exchange

At the moment, it’s impossible for anyone to say for certain whether the pound will weaken again, remain stable, or strengthen – and in what timeframe. When it comes to choosing when to exchange your holiday money, you can either choose to exchange your money now to lock in today’s exchange rate in case sterling falls again – or – you can wait until nearer your departure date to see if the pound recovers.

There are no guarantees which way it will go, but keeping an eye on what the experts are saying will help you make an informed decision. The main thing to avoid is turning up at the airport and hoping for the best. Exchange rates at airport bureaux can be extremely expensive, so shop around in advance instead to make sure you’re getting the best value.

Paying by card

Another alternative to cash is to take a pre-paid currency card. This will allow you to pay by card abroad, but with an exchange rate that’s been locked in before you travel when you transfer the money to your card.

There are also specialist credit cards available that don’t charge overseas transaction fees and have special exchange rate terms. However, the exchange rate you pay on the card can still vary and you’ll be paying the current exchange rate at the time of purchase, rather than a rate you’ve locked in in advance.

The higher your credit score, the more likely you are to be accepted for the most competitive rates, so use eligibility checkers to understand what you’re most likely to be accepted for before you apply and avoid wasted applications that can negatively affect your credit score. Specialist credit cards work in the same way as regular credit cards, so make sure you can afford to pay back what you spend on the card during your holidays and that you don’t miss a payment after you get back.

Whenever you’re paying by card, whether debit or credit, it’s better to pay in the local currency than in sterling, as you can be charged an additional fee otherwise.

Savvy spending

Aside from getting the best deals you can on currency, there are some other ways to save some cash.

In advance:

• Raid your piggy bank for old currency you may have left over from previous trips. Even small coins add up, and an extra €20 could get you a free lunch at the beach!
• Think about what you’ll be doing on holiday and divide activities into a list of must-dos and things you could do without. This will help you plan where to spend your money doing things you love, while avoiding a post-holiday hangover caused by over-spending on things you could have dropped.
• If you were planning to hire a car, consider whether you really need to. If your accommodation is close to local amenities, why not walk or use public transport, and free up money to spend on meals or other activities?
• Shop around for the best deals you can get on travel insurance, rather than automatically opting for the first deal you’re offered when booking your holiday.
• Check your roaming package with your mobile phone provider. You may be able to buy a low cost overseas bundle in advance. Regular roaming and overseas data charges can be very expensive, so make sure you don’t end up with a massive bill when you get home.

At the airport:

• Don’t be lured into unplanned airport purchases. Do your holiday shopping in advance, including toiletries and sun protection, and avoid the temptation of duty-free stores.
• Food at the airport or on a plane can be costly, so consider bringing a packed lunch.

When you get there:

• Consider alternating eat-out/eat-in nights. It’s possible to enjoy the local cuisine at home too, so look for a good-sized supermarket that will have a variety of foods to choose from. When you do eat out, veering off the beaten track a little means you can often find local places, where you’ll get better quality and value than the typical tourist traps.
• Local beers and wine can often be much cheaper than more well-known international brands, which can keep costs down on poolside drinks or nights on the town.

If you haven’t yet booked a holiday overseas, you might want to avoid the uncertainty of exchange rates by planning a ‘staycation’ within the UK. We have stunning beaches, picturesque villages and beautiful countryside – so, just because you can’t get overseas doesn’t mean you can’t have a fantastic holiday right on your doorstep. Check out our latest post looking at the pros and cons of staying put versus taking flight.

Holidays: Staycation v Going Abroad

JWhere are you going this summer holiday – flying off somewhere or staying in the UK?  More than 1 in 10 Britons say they are less likely to go abroad this summer.  And with the pound having taken a big hit in recent weeks, it’s not hard to see how the temptation to choose to stay put in the UK is growing.

We look at the factors – cost and otherwise – and try to work out which is best.

Hotels and location
GO – It often doesn’t just depend on where you go, but when you go. Whether you stay or go, school holidays are always likely to be more expensive.  Costs vary from country to country, and the pound doesn’t go as far as it did a year ago.  Popular western Mediterranean islands like Mallorca and Ibiza are also becoming premium destinations now, with good hotel rooms hard to come by, as security fears make many holidaymakers avoid certain hotspots that are now considered to be danger zones.  Bookings to Portugal and Spain are respectively up 23% and 22% since last year.

STAY - Hotel prices in the UK are often higher than a comparable hotel abroad – there are fewer of them, plus there’s competition from overseas visitors and businessmen. In addition, the sunny days are so infrequent that when it does look as though it’s going to be sunny, competition for rooms is high. But Devon, Cornwall and the Channel Islands are particularly popular right now, with ‘strong sales’ reported.  Continue reading

How could a drop in interest rates affect you?

Despite most experts’ predictions that the Bank of England would announce an historic drop in interest rates to 0.25%, interest rates today (14 July) held firm at the same 0.5% rate they have been since 2009.

The surprising news has been welcomed by many economists, many of whom feel that now is still too early to make such a key change at a time of such national uncertainty.

But it’s not over yet…
However, the Bank’s announcement today also suggested that a rate cut was certain if the economic situation failed to improve over the next month – the statement reading that if that were the case, then “most members of the committee expect monetary policy to be loosened in August.”

So if it does happen, what could that mean in practical terms? 

Mortgages – For those on a tracker mortgage, as long as your lender passes on the cut to its own base mortgage rate (or if it is linked directly to the BoE base rate), your rate (and monthly payment) should go down.  In all, there are about 1.5 million trackers in the UK.

However, some banks and building societies have a ‘tracker floor’, which means there is a limit to how low the percentage can go above the Bank of England base rate. In this case, your rate (and mortgage payment) would be unlikely to change.

If you have a fixed rate mortgage, you wouldn’t be affected if the rates went down during your fixed period, but when the time comes to re-mortgage – or if you’re a new homebuyer – , the options open to you could potentially be more favourable, with some experts suggesting long-term fixes even going below 2%.

Savers – In the event of an interest rates cut, it may depend if banks chose to pass on the cut to savings accounts. Some savers may decide to switch to bonds or shares, which could have the effect of driving those prices higher.

For pension savers who are using an annuity, a rate cut could make annuity rates fall by putting pressure on the long-term. This could have a potential negative effect on employee pension schemes too.

Needing currency for holidays – While interest rate cuts can often mean a weakening of the pound, it may well be the case that the currency markets will have been factoring in a cut for some time already – hence there may be little change if it does eventually happen.  Interest rate cuts can be done sometimes to provide an economic stimulus – to encourage people to spend rather than to save – so perhaps this could help improve consumer confidence and boost the pound.

But what about when it does rise? - Mark Carney, Governor of the Bank of England, has warned against expecting interest rates to stay low forever in these uncertain times, and suggested that homeowners would do well to prepare their finances to be ready for a potential rise of up to 3% in the coming years.

Many homeowners, particularly those who’ve joined the market in the past seven years, will have never been faced with an interest rate rise, and tighter borrowing conditions in the future could make it harder to cope with a rise.

How your credit score could help –  Having a higher credit score could mean you get better deals or lower interest rates on credit, loans and mortgages. The Experian Credit Score is a guide to help you understand your Experian Credit Report, and how the way you’ve managed the credit you’ve had in the past might affect applications you’re making now.

It can also help you to monitor your progress as you get your finances in order before you apply. Getting your credit score up could open up the potential chance to get better rates.

Does financial responsibility make someone more attractive?

scales-image-300x200The summer months are often when love can bloom as people enjoy the sun and fun. People pair up with each other for all sorts of reasons, but is it true that one of the biggest is the way they manage their finances?

Well, could it be that most women prefer a man who’s responsible with money to a George Clooney lookalike with a degree?

A nationwide Experian survey of couples in relationships in 2014* asked if financial responsibility would make someone more attractive. 29% in total said it would, while 35% of women said this would make a male ‘much more attractive’.

However, 3 in 4 of women (75%) said they rated financial prudence more attractive than appearance, education or background, and on a par with intelligence (74%).*

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Home sweet home – a ‘staycation’ summer

Guest blog post from Tracey Davies, PayPlan

With summer finally upon us, a lot of families will be thinking about heading off on holiday.

Mother and kids hiking in sunny forestBut if you’re trying to rein in your spending, you might find that it isn’t financially feasible to go far.

As the cost of living increases, the popularity of ‘staycations’ is soaring as more people opt to stay at home – however it’s not always the most affordable option.

With the cost of attractions, activities and eating out in the UK relatively high, it can still add up – but it doesn’t have to.

Being prepared can help you have a great holiday at home without breaking the bank and our tips can show you how.

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Brexit: a week on

BrexitLast week’s vote to leave the European Union was a big milestone in the UK’s history, and, understandably, has brought with it some uncertainty. 

Here at Experian, we’ve been working with people and businesses through times of prosperity and times of uncertainty for many years.  And while we understand that uncertainty can be unsettling, our message is simple – don’t panic. In particular, don’t make rash decisions about your finances and always consider the pros and cons of any financial decision you have to make.

Many of us are wondering what might happen next, when, and how it might affect us, so let’s take a closer look at the situation.

What does leaving the EU mean?
One of the basic elements of the EU is that all the member states (of which there are currently 28) make up a ‘single market.’ This guarantees the free movement of goods, money, services and people; basically as if the EU were one country. However, beyond being simply a trade association, the EU is a form of government and so has some legal powers over its member states, so there are some UK laws that have their origin in EU law.

Last Thursday’s vote was specifically for the UK to leave the EU. However, the decision does not rule out the possibility of the UK having access to the single market for trade purposes (European Economic Area). The Government could, for example, opt to try to negotiate a similar model to Norway, which is not part of the EU but is part of the EEA which gives them access to the single market.

It is in the interests of the UK and the rest of the EU to negotiate a compromise that works for all countries, but at this stage – and until the new leader of the Conservative Party is elected – all options are on the table from the UK’s side.

What’s next?
For the formal process to begin for the UK to officially leave the EU, the UK Government must invoke Article 50 of the Lisbon Treaty . Article 50 effectively starts the clock on a two-year countdown, after which the UK leaves the EU. During this time, the UK and the EU negotiate the details of the UK’s new relationship. However, following David Cameron’s resignation the country first needs a new Prime Minister in place to lead these negotiations.

A Conservative leadership election is now underway with the candidates confirmed as Theresa May (Home Secretary), Michael Gove (Justice Secretary), Stephen Crabb (Work and Pensions Secretary), Liam Fox (Former Cabinet Minister) and Andrea Leadsom (Energy Minister). A new leader of the Conservative Party and Prime Minister is expected to be announced on September 9th. The new Prime Minister is then at liberty to begin the Article 50 process.

What to keep an eye on
The next few months are going to be very interesting and that’s before we even begin formally negotiating to leave the EU. There are a number of key things that we can all keep a close eye on over the coming months that may affect us and our finances:

  • Interest rates could be affected. Whether they rise or fall will impact different people in different ways.  For example, lower interest rates might mean better deals for borrowers, but savers might suffer, earning less interest on their money. If you have a tracker mortgage, you might find your mortgage payments fall if interest rates come down.  If you are about to get a mortgage or re-mortgage, or apply for a large loan, ensure you are getting the advice you need and check your credit report early to make sure it’s accurate and up to date and paints the best possible picture of your financial situation.
  • Exchange rates change regularly, and are likely to continue to do so, meaning you’ll get more or less for your pound depending where you travel.  Since the referendum result, the pound has weakened against the Euro and the Dollar; however, there are still many countries that offer good exchange rates for British people travelling abroad. Wherever you choose to travel, make sure you shop around before you go on holidays and secure the best rate you can in advance, rather than just turning up at the airport and hoping for the best.
  • Inflation may rise, which could mean changes to the cost of living, which could affect your disposable income. Make sure you know how and where you’re spending your money. This will help you understand if there are areas you can cut back on so you can confidently manage your finances and put some money aside if you can afford to.
  • Property prices could change in time; however, in the immediate future, it’s looking unlikely that property prices will rise, which could be good news for first time buyers looking to get on the property ladder.

We think we should use this time as an opportunity to take stock of our finances.  It’s the simple things like checking how much you have coming in and going out each month, what you’re spending money on, and knowing the interest rates on your mortgage, loans and credit cards. By doing this, you can get an overall picture of where you stand now, which will help you make better, more informed decisions. Things will eventually become clearer, and we’ll be here to support you every step of the way.

Most of us have lived through periods of uncertainty, both in the UK and in other parts of the world, and we’re fully confident we’ll come out the other side. It will take a while for things to stabilise, but we have no doubt we’ll get there. And during the good times and periods of uncertainty, our commitment to you and all of our customers will remain the same as it’s always been: to help you understand, manage and improve your credit report and help you get access to the best financial deals you can afford, whatever unfolds in the future.

6 last-minute holiday money-saving tips

Did you know that this is the week there are the most online searches for holiday money?

According to Google Trends*, in 2015 there were 100,000 online searches for holiday money in the week ending 4 July, higher than at any other time in the year.

Before you go on holiday this summer, it’s worth remembering that there are many ways you could cut costs before you’ve even touched down.

  • Waiting until you get to the airport to make essential purchases makes you a captive customer – you’ve literally got nowhere else to go, so you’re likely to pay a premium for exchange rate and small items. So get your pounds to euro, pounds to dollar sorted out in advance, get your sun cream & toothpaste from pound shops, and book your airport parking as soon as you know your flight times – and you might save a packet.

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How do you work from home?

Working from homeThe work environment has changed a lot over the generations.

From the cheery local shopkeeper who knew everyone, to the zero-hours contractor who lives from day to day.

From the days of rows of ‘worker bees’ in hot, sweaty factories, to, well, ‘worker bees’ in air-conditioned, open-plan offices.

(Video: See how the working world has changed over the generations)

Perhaps that’s why so many people nowadays choose to work from home, even if only for part of their week.

People work from home for all sorts of reasons. Perhaps they want more freedom and want to fit their work around their lives more, perhaps their employers feel they’ll be more productive, or maybe they are self-employed or a freelance.

Figures to mark 2016’s National Work From Home Day last month found that a record number of over 1.52m people now work from home, an increase of a quarter of a million over the past decade, with women accounting for 65% of the increase.

We asked some of our favourite bloggers to tell us their top tips for working from home, why they recommend it, and how to ensure you get the most out of it.

Sally Whittle, who runs the super Who’s The Mummy blog, told us how important it was to make sure you’ve got the right environment to work in – and not just sat at the dining table: “Invest in a good, adjustable chair (even if you use it at the kitchen table), a decent worklight, ergonomic mouse and a proper screen to plug a laptop into.

Gina Caro, whose Gypsy Soul is one of our favourite lifestyle blogs, agrees: “Have a designated work space, whether that be a small desk in the corner of a room or a complete office. It’s really important to have an area that is purely for work.”

The temptation to let your mind drift when you’re working, and conversely to feel that you’re ‘always on’ day and night – is something you may need to avoid.

Sara Williams from the incredibly useful Debt Camel blog has this advice: “If you need to get something done, stop checking your emails and social media.”

After many years, I ditched my laptop at home because the temptation to be “always on” was impossible to resist” added Sally Whittle.

“With a desktop computer on a desk in a single room, I’m a lot less likely to be distracted while I’m cooking dinner, watching TV or whatever.”

Gina Caro recommended getting into work mode as soon as possible : ”Always get up, get dressed and ready for the day as if you were going out to an office. It helps you to feel more motivated and stay in work mode.

And how about balancing flexibility with deadlines? Sally has this to say: “I generally do religiously keep evenings free between 4 and 9 when my daughter is around, and then I know I do have those ‘spare hours’ if I need once in a while to take a day out, or go to sports day.”

Sara Williams adds: What I love best is no commuting – and being able to have a dog.”

Gina also told us why she loves working from home: “It gives me the flexibility to work around my children without the need to pay out for childcare.

“I love being my own boss and setting my own targets, although you do have to be self motivated which some people can struggle with.”

So there you have it – to work from home you need to be motivated and disciplined, but it can be rewarding both in time management and family life.

Do you work from home? Share your tips and recommendations with us at @ExperianExperts and we’ll re-tweet the best ones!

 

How working life has changed: future-proofing your finances

The working landscape has changed immensely in the past 50 years, and in many ways is unrecognisable from that of a generation or two ago.

Types of jobs
There are high-frequency job titles that didn’t exist a generation ago, many of them arising from the internet and the rise of technology – web developer, digital marketer, social media manager, SEO specialist and so on – but also elsewhere, such as Zumba instructor, dietician or app builder.

While few job titles have actually bitten the dust, some common in the 60s or 70s are getting more and more harder to find – the ‘traditional’ office secretary, typesetters, milkmen, high street travel agents.

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5 tips for an ‘ace’, money-saving Wimbledon visit

wimbledon-tennis-strawberries-300A visit to Wimbledon fortnight is, for many of us, a highlight of the British sporting summer, along with the Open and the British Grand Prix.

Most of the tickets for the Show Courts, of course, have long since been sold – that is, if they were ever on sale in the first place, as so many go to sponsors and guests.

Every year since 1924 there’s been a public ballot for advance tickets, as demand for tickets way outstrips supply around four times over. Even if you get a ticket, you can’t request the date or court – you have to accept what you’re given.

Read on for our five top tips for a money-saving day at SW19!

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