Strength of sterling is a key holidaymaker concern as numbers of Britons heading abroad leaps for the fifth year running

• Two-thirds of Britons plan to holiday abroad this year despite concerns about affordability and travel costs (www.postoffice.co.uk/holidayspending)
• More than half will increase budgets to cut the 37% average overspend on their last trip
• Over three-quarters of holidaymakers worry about sterling’s value and Trump’s tariffs
• Britons rate Spain, Turkey and Thailand as best value – but Thai baht is one of only five bestselling Post Office currencies to surge against sterling since last summer
• Exchange Rate Monitor shows visitors to Turkey will get the most for their money

For the fifth year running, Post Office Travel Money’s Holiday Spending Report reveals a sharp rise in the numbers of Britons planning trips abroad. Two-thirds (66 per cent, up five per cent year-on-year) of those surveyed for the annual report say they intend to take a holiday abroad this year¹, and more than half (54 per cent)²have already booked their trip despite growing concerns voiced by nine-in-ten of them about whether they have enough money to afford the trip. In spite of this, holidaymakers say they are setting bigger budgets after overspending by an average of 37 per cent on their last trip but admit to being worried about sterling’s strength and the impact of the planned US trade tariffs.

Over three-quarters (77 per cent) told Post Office, the UK’s largest foreign exchange provider, that exchange rates are a big concern for them, while even more (78 per cent) are worried about the impact that US trade tariffs might have on prices in destinations abroad. As a result, over half (53 per cent) will actively avoid destinations where they think the tariffs could affect resort prices, while two-in-five (39 per cent) will not travel to the USA even though they had previously considered doing so.

Looking at where they might travel instead, holidaymakers rated Spain (41 per cent), Turkey (35 per cent) and Thailand (31 per cent) best value for money out of 39 worldwide destinations. Yet, the latest Post Office Exchange Rate Monitor, published within the Holiday Spending Report for the first time, found that the Thai baht was one of only five of the 30 bestselling currencies to rise in value against sterling. A sterling year-on-year fall of 5.2 per cent means that British visitors will get £27.64 fewer Thai baht on a typical £500 currency transaction.

Given that almost half (48 per cent) of holidaymakers said they will choose their destination based on the strength of sterling, two other Far Eastern destinations – Vietnam and Bali - will offer Britons more for their money. Visitors to Vietnam, which took seventh place in the Post Office’s Worldwide Holiday Costs Barometer earlier this year, will get the equivalent of £42.01 – or 9.2 per cent extra - on a £500 purchase of Vietnamese dong. Those choosing Bali, fourth-placed in the barometer, can expect around £33 (7.1 per cent) more in Indonesian rupiah than a year ago.

The Exchange Rate Monitor looked at how sterling is performing against Post Office Travel Money’s 30 bestselling currencies compared with 12 and three months ago. It reveals that the UK pound is stronger than a year ago against 25 of the 30 currencies and has gained ground against 80 per cent of them since March. The monitor shows that visitors to Turkey will get the most for their money.

Although visitors to Eurozone countries will get slightly more – just under one per cent - for their money compared with last year and marginally more than three months ago, this is dwarfed by the ongoing long term collapse of the Turkish lira. The scale of this is shown by the 12.9 per cent fall of the lira against the pound over the past three months. Compared with last June, visitors can now expect to receive around £116 (+30.2 per cent) more when they buy £500 worth of lira.

Sterling has also bounced back against the US dollar and is currently 6.6 per cent stronger than a year ago as well as having gained 4.9 per cent in the past three months. Although demand for US trips may be in question, holidaymakers can still benefit as the dollar recovery also extends to the Caribbean and Middle East currencies that are pegged to the dollar. It means Britons planning trips to Barbados, Antigua, Dubai and other long haul holiday favourites will get more for their pounds.

The Holiday Spending Report compares the financial intentions expressed by holidaymakers now with their past behaviour. In a change to previous years, over half (52 per cent, up from 22 per cent questioned in January) say they will budget more for their next holiday due to increased costs. However, the report concludes that a significant budget increase will be needed because of the high levels of overspending by holidaymakers on their previous holiday. Over four-in-five (82 per cent) of them said that they had set a budget averaging £377 on their last trip but seven-in-ten (71 per cent) admitted overspending this by £140 – 37 per cent more than their budget.

Laura Plunkett, Head of Travel Money at Post Office, which accounts for one-in-four UK foreign exchange transactions, said: “This year’s holiday spending research again demonstrates that holidaymakers don’t always set a realistic budget and overspend by large amounts as a result. It’s great to hear that holidaymakers are already planning to budget more for their holidays this year, to avoid coming unstuck when they arrive at their destination.”

The report also found that worrying habits persist when making payments abroad. While it is well recognised that it is advisable to carry some cash overseas, one-in-five (21 per cent) relied solely on plastic to pay for purchases and a quarter (27 per cent) changed less than £100 into foreign currency. As a consequence, more holidaymakers ran into difficulties. Seven per cent tried to pay a restaurant, shop or bar bill with a credit card, only to find that it was not accepted. More than one-in-ten (11 per cent) also fell foul of a practice known as Dynamic Currency Conversion by agreeing to pay on their card in sterling rather than local currency, incurring unnecessary transaction charges as a result.

14 per cent withdrew money at an ATM and incurred bank transaction charges as a result. This was most likely to happen to younger holidaymakers. 17 per cent of those in the 25-34 age group and 19 per cent of 35-54 year-olds admitted paying transaction charges on cash withdrawals. Five per cent said they could not find an ATM, while four per cent found that the machine was out of order or would not supply them with cash.

Laura Plunkettsaid: “Paying on a debit or credit card may seem like a convenient way to pay for things while abroad, but our research suggests that this can be a costly practice. Far too many holidaymakers told us that they paid significantly more than they anticipated because of the transaction charges made for using credit and debit cards at an overseas ATM.

“Using a prepaid card abroad, such as the Post Office Travel Money Card is likely to be a better solution. Not only can money be loaded onto it at home when exchange rates are looking positive, but it does not incur transaction charges when used abroad. What’s more, the money left on it at the end of a holiday can be converted into any one of 22 different currencies for your next holiday.”

One-in-eight (13 per cent), rising to more than one-in-five (21 per cent) of older travellers aged 55-64. chose to load cash onto a prepaid travel money card, according to the latest spending research.

Ends

The full results of the 2025 Post Office Travel Money Holiday Spending Report can be viewed online at postoffice.co.uk/holidayspending.