All try to feather nests at Easter

Personal Finance

EASTER is becoming a time for giving, and getting, second only to Christmas as one of the two great materialistic festivals of the year, ranking ahead of Mother's Day. Easter eggs and nest eggs are birds of a feather, and the financial services industry is latching on to the idea that it is an opportunity to sell something extra to those who have only just finished their end-of-year tax planning.

Johnson Fry, the investment house, for example is trying to persuade godparents and grandparents to chip in to Children's Equity Plans, which take advantage of the fact that children have the same personal income tax allowances as adults. The scheme can help pay for school fees as well as building up a nest egg for children.

Easter is also a time for travelling and the first mass migration to Mediterranean holiday hotspots. It is an opportunity for Churchill Insurance to remind motorists that driving abroad is a dangerous business and warn them they may be under-insured. Road deaths in Britain and the Netherlands are just 8 per 100,000 of the population. The numbers accelerate from 12 in Ireland and 13 in Germany to 14 in Italy, 17 in France and in Belgium, to 20 in Greece and Spain and to 34 in Portugal.

It is also a time of year when the banks fly in peseta and lira banknotes by the million to cope with the seasonal demand for currency. It is also the start of another profitable season for banks and bureaux de change, which insist that they need not only commission but a 6-8 per cent spread between the rates at which they sell foreign currencies and the rates at which they buy them back.

To the extent that supply and demand for a currency balances out, this is quite unnecessary. And even where they end up holding an excess of any one currency, the number of times that they will lose money on a currency devaluing by more than their built-in dealing margin will be perhaps one in 500.

It would be nice to think that the formal entry of post offices to the currency exchange market last week will bring down spreads through aggressive competition. But don't, as they say, bank on it. We may have to wait for the arrival of the common European currency to make the cost of travel money less of a burden on foreign travel. Now there's a thought.