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Clare Francis: If like me you're about to head off on holiday, you're probably all too aware of the fact that the pound's fallen in value against the Dollar and the Euro recently, and if you are yet to buy your travel money you're probably wondering what is the best options and whether you should buy it now or hold off for a few weeks, and hope that it might strengthen again.
Well, I'm with James Yerkess today, who is travel money manager at M&S Money, just to talk about what's happening, and what the options are for holiday makers.
Q1: So, James can you just explain first of all a little bit about why sterling has fallen so much in value in recent weeks?
James Yerkess: Well currencies are linked to the wider economy in countries across the globe, and over the last number of years you've seen the economies move up and down in line with some of the wider economic issues that we've seen. So when a currency moves one way up, or one way down, its linked very much to the confidence in a country.
So what you're seeing at the moment in regards to the UK pound, is a lot of factors affecting the UK economy - like interest rates, like a number of things around economic inflation - affecting what the value is to people who might be willing to invest in the United Kingdom.
Q2: How are people reacting to it? Are people holding off and waiting to the last minute to get their holiday money in the hope that the pound will strengthen again, or are they getting it now because they're concerned that the warning by the shadow chancellor, George Osbourne, that sterling might fall through the floor, that it might actually get worse if they hold off? Are you seeing any pattern?
JY: Now what I would suggest is that you live in the present rather than necessarily trying to speculate on whether currencies will go up or whether they'll go down. I mean, my view would be 95%-98% of people are taking a trip abroad either on business or for a holiday -with that in mind they're not really speculating in terms of whether their money will be worth more or less in a week or two weeks time - and I think with the volatility that we're all seeing, nobody would have predicted a 1.5% cut in base rate a few weeks ago.
I think the simplest way is to live in the present at the moment, and if you need to take money, take it sooner or buy it sooner rather than wait and speculate on what the currency will do.
Q3: What's the best way to get holiday money, because a lot of people leave it right until the last minute and buy it at the airport, or the ferryport or the station or whatever, but you tend not to get the best exchange rates there do you?
JY: Again, we're all feeling the pinch in the pocket and we're all making our pounds go a bit further, so shop around for a provider that provides rates that are consistent throughout the year, consistent across locations. A number of providers provide rates that are different in different parts of the country. Someone, like M&S for example, offers the same rate across the whole of the UK so it's important to make sure you pick someone who's got a good rate that's based across the entire UK, so no matter where you are, you're going to get the same good deal.
Q4: Why do currency exchange rates vary so much?
JY: I think individual providers will clearly have their own plans for how they sell their money to the consumer, but what I would say is that at M & S, whether you buy on the telephone, online or whether you go into one of its stores to buy your money, you're going to get one consistent rate.
It keeps it simple, rates are complicated enough without trying to work out whether you live at one end of the country whether you're getting a good deal or a bad deal. That's the first thing I would do in terms of when you're picking your holiday money.
The second thing is your location, in terms of where you go to buy it, and I certainly would not recommend leaving it late and buying it in the airport. We all know, and I think people who buy at the airports also know, that the exchange rates you'll get when you're in the airport will be significantly worse than those if you plan a little bit further in advance and get your money before turning up.
Again with the current economic climate and every pound counting, particularly at Christmas, why give your money away to someone in an airport when you can go onto the high street or online a couple of days in advance and get your money in a much better rate.
Q5: Because online services, they're relatively new aren't they? We've seen them expand over the last few years, but they fit in with everybody's lifestyles don't they because you don't have to remember to go and order your currency a week before you go - you can order it online and then have it delivered to home, work or collect it from, in the case of M&S from an M&S store. Do you tend to get better rates online?
JY: Firstly, around online as a way to buy your money, it's all about convenience. We want to be providing services that fit with what people want to do - I mean moneysupermarket.com is a good example of making things simple and convenient and getting good value - and this was a good example in terms of online, in that it's meeting the demands of what customers want to order online rather than go into a store or a bureau.
Now again if you take a provider like Marks & Spencers, it's the same rate whether you are online or whether you go in-store. It's the same great rate, good rate. Now some providers will offer a better rate online, but they won't share that with the customers who go into their stores, so again I think it's about, for many people: simplicity, ease, convenience.
Why get confused again about when you buy your rate, whether it's better online or whether it's better in the store - offer one simple rate and then people know they're getting a good deal whatever way they buy it - and the key bit is then is just down to the convenience of how they want to buy.
Q6: What about traveller's cheques, and using a debit or credit card? Would you recommend people have different methods of payment for when they're going on holiday?
JY: I think we're all holiday-makers, I've been on holiday recently with my family, and I think it's about a balance. I would recommend taking a degree of cash or a reasonable amount of cash, because you don't know when you get to your location what facilities will be there to use a card, whether there will be problems with it etc, so always take cash, that's certainly the first thing.
The second thing is though, I would take a card particularly if you're planning on buying a bigger or larger purchase abroad, because some of the protections that are offered around the cards.
CF: That's a credit card isn't it? Because you don't get the same protection on a debit card...
JY: - Yes, that's right. But again the fundamentals for most people who are planning either a ski-break or a holiday is take some cash with you, make sure you've got that and at the same time have the security of a card just in case you need to use it.
Q7: And we mentioned earlier it is coming up to the time of year with the winter holiday season - are you seeing any sort of spike at the moment as people are heading off on holiday for Christmas, or do you think the credit crunch is taking it's toll and fewer people are going away?
JY: I don't know about people going away, because obviously we sell currencies and buy currencies, so it's difficult to tell from that what holidays are necessarily doing, but what I would say is that we're certainly still seeing good demand for currencies through our retail business - we've got 117 sites across the UK and they're still seeing good flows of people in.
I think that people perhaps are being more cautious with where they go and what they spend, and they're thinking carefully about their holiday and where they change their money, hence maybe why we're still seeing good flows of people in with the good rates that we offer. I think the other thing to bear in mind is people are being much more sensible in terms of what they do when they go on holiday as well, and budgeting perhaps a little bit more and planning a little bit further in advance.
A certain final thought would be if you're planning a holiday now in the current climate have a great time, because this is a good time to be having a break, so really enjoy it and take yourself off!
CF: Lovely, thanks James, thank you very much.
JY: Thank you.
