Summer is finally here and it’s time to recharge our batteries with family and friends. But while many are counting down the days until they’ll be lying on a sun-kissed beach or enjoying fun days out with the kids, a significant number are worrying how they will pay for it all.
New research by Government-backed body the Money Advice Service has found that, on average, we will each spend £1,027 on holiday in the coming weeks. This adds up to a total holiday bill of more than £27bn across the nation.
Four-fifths plan to use savings to pay for this, but an estimated one million holiday-makers will resort to borrowing, by digging into their overdraft or turning to family members or an expensive payday loan.
Even for those staying at home, costs are a major concern, with a separate recent study suggesting that two-fifths of parents are fretting over the cost of entertaining their children this summer.
So how can you boost your budget at home?
If you’re a working parent, one way might be to store up your childcare vouchers, which allow you to pay for childcare out of pre-tax wages. Basic rate taxpayers can pay for up to £243 of childcare a month with the vouchers.
However, voucher provider Computershare says that many parents do not realise they can also be used for activities other than “traditional” childcare, such as holiday camps, activity clubs and music lessons.
“Childcare vouchers are far more versatile than some parents realise,” says Julian Foster, managing director of Computershare Voucher Services. “This means lots of families may be missing out on vital savings by failing to take advantage of their many uses.”
A well-planned staycation can also save cash. Whether you’re looking to soak up some culture or find out more about scientific endeavour, consumer help website MoneySavingExpert lists the free museums and galleries across the UK by region (moneysavingexpert.com/deals/free-museums-and-art-galleries).
Or take inspiration from the Visit Britain website – visitbritain.com – which has a ‘special offers’ section including travel and accommodation deals and theatre trips.
Other organisations, such as Cadw in Wales (cadw.wales.gov.uk), Visit Scotland (visitscotland.com), English Heritage (english-heritage.org.uk) and the Northern Ireland Tourist Board (discovernorthernireland.com), all have ideas for days out.
Although transport costs around the country are often pricey, booking a train journey in advance could save you some cash compared with turning up at the station on the day of travel.
There have also been signs of a petrol price war breaking out in recent weeks among the supermarkets, which might be worth bearing in mind when you go to fill up at the pump this summer. Petrol stations based near supermarkets may also be offering more competitive prices to keep up with their neighbours.
And how can you make the most of your money if your heading abroad?
When travelling to foreign climes, it pays to both plan ahead and be spontaneous. Make sure your insurance will cover you if something goes wrong. The ombudsman has seen cases of people trying to claim on travel insurance that has come as part of a deal they have with a paid-for current account, only to find when it is too late that they are not covered.
If you are travelling to a country within the European Economic Area or Switzerland, apply for a free European Health Insurance Card. This entitles you to cost-reduced medical treatment but is not a substitute for travel insurance (ehic.org.uk).
Forward planning pays off when exchanging money, as it will give you time to shop for the best rate. You can pre-order currency online or pick it up at your bank. Leaving it until you get to the airport will ramp up the cost.
Ask your bank about the cost of using your card abroad, any added fees and what the rate would be to get money straight from cash machines at your destination.
It might be worth considering using pre-paid cards as a more secure option to carrying cash. Money is loaded onto them and they can be used to lock in a good exchange rate.
And if you are asked on holiday if you would prefer to pay in pounds or Euros, the latter is often a safer bet as the retailer will make the conversion.
Planning a holiday with a group of friends can also save cash, as renting a villa or apartment can work out much cheaper than staying in a hotel. Think about using public transport to get to the airport in order to sidestep airport parking charges. Leaving things until the last minute can pay off in some situations.
If you are flexible about when and where you want to go, there are many websites which will help you to snap up a last-minute bargain. But if you book your holiday this way, take a little time before you click ‘accept’ to check you are not being overcharged compared with other similar deals.
The Money Advice Service has a summer cost calculator online (moneyadvice service.org.uk/summer).