Will foreign currencies kick sand in your face?

MONEY TALK

As Well as escaping dreary Britain, an extra plus of going on holiday recently has been the unusual strength of the pound.

Sterling rose some 15 per cent against European currencies in the last quarter of 1996. A pricey Paris at seven and a half francs to the pound in the autumn sun - two quid for a glass of local plonk - became slightly more affordable at eight and a half francs to the pound as winter closed in.

Elsewhere, while a rate of two US dollars to one pound is long gone, you've been able to get $1.60 or more since the autumn instead of $1.50.

Earlier this month Thomas Cook was predicting a further strengthening of sterling in 1997 - another 5 cents or more per pound for those Florida- bound, for example.

This positive picture needs to be reversed for those with unit trust- type investments in foreign stock markets: a strong pound means investments are worth less when translated back into sterling.

This week, however, the pound stumbled, raising the question of whether the recent gains against other currencies might be wiped away. Most analysts doubt this pessimistic scenario, but holiday makers may still wonder if they should go out and buy their currency now for spring or even summer holidays?

The answer is probably not. Buy your currency now and you may end up saving a little. But you could just as easily lose out by the time you come to go on holiday; currencies are volatile creatures. Meanwhile, you'll be holding a currency you can't use and won't be earning interest on.

A far cleverer tip for managing your holiday money is to think plastic. Credit cards particularly, but also cashpoint withdrawals of local currency and debit cards, normally give better exchange rates than cash or traveller's cheques and with none of the security risks of cash. Plastic will not work for every country, but with just a smattering of spare cash you should be okay in much of Europe and the US.

Investors, meanwhile, can comfort themselves with the knowledge that, over the years, they have tended to benefit from a general decline in the value of sterling.

THE IDEA of a pensions price war may not set too many pulses racing. But the improved value offered by more and more personal pensions is welcome, if not before time. First Virgin Direct, then Eagle Star and now investment firm Flemings all aim to offer cheap, comprehensible products with the flexibility needed by today's workers, for example to stop payments at any time without penalty. More companies can be expected to follow suit.

If this competition does galvanise you into action, my advice is that you first get hold of a copy of the Independent/ Independent on Sunday's new 52-page guide to pension planning, free to readers. The guide, sponsored by Equitable Life, will tell you a lot of what you need to know about pensions, including what to expect from the state and how to make the most of company arrangements. Call 0800 137 372 or cut out the coupon below. Think of it as the first step to what should be the longest holiday of your life.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness