Agonising over whether to get your holiday money before the result? There is an answer

EU referendum
EU referendum

Yesterday saw a panic-buying of currency, as people who are planning to travel oversees this summer started to stress out about the possible impact on the pound if the UK left the EU. Estimates have put the possible fall in the pound at around 15% if the country votes to leave. However, there's always the possibility that the country decides to remain - and the pound rebounds in a relief rally - leaving us having paid over-the-odds for our currency. It seems impossible to know the right thing to do, but there is an answer.

There is a broad consensus that the pound will be less valuable if we leave (at least in the short term), and more valuable if we remain. So technically all we have to do is decide which way the country will vote, and take appropriate action. The trouble is that the result is on a knife-edge.

Different publications have produced polls suggesting a range of possible outcomes - and clearly show that everything hangs on which way the 'undecideds' decide to jump - or whether they don't bother voting at all.

What should we do?

Among holidaymakers, it seems the fear of losses has overtaken the hope of a better rate, and yesterday saw Brits flock to change their cash. Online travel exchange company Fair FX said transactions were up 300% on the same time last week, while high streets saw people queueing to get their holiday money.

There's a good chance that this was prompted by the fact that concerns over Brexit had sent the value of the pound to a two-month low last week, and the easing of fears over the past few days has seen the pound bounce back - to €1.30. People have been shaken by the falls, and feel they want to take advantage of the current rate in case it moves again tomorrow.

If you are convinced of a Brexit, you might want to join them in order to gain certainty over the cost of your holiday money.

If you're unsure, then Laith Khalaf, senior analyst at investment firm Hargreaves Lansdown says one sensible option is to hedge your bets by buying up to half your money now, and half after the vote. It means you won't get the best possible price, but you will rule out the possibility of buying it all at the worst possible time.

Some companies also offer a service, which lets you pay a fee when you get your money, so that if the pound rises dramatically before you have spent your euros, they will buy them back at the same exchange rate - leaving you free to make the purchase again at a more favourable rate.

Travelex, for example, charges a £3.99 buy-back guarantee fee when you pick up your cash. You can then sell the money back for a full refund at any time in the next 45 days. This will only pay if you are planning to exchange a large sum of money, or if the value of the pound changes significantly, but it might offer peace of mind.

Whatever you choose to do, it's essential to shop around for the best possible exchange rate, both online and on the high street. If you make the right call on the movement on the pound, but buy it from the wrong place, you could still end up worse off than someone who jumped the other way but shopped around.


Martin Lewis, the Money Saving Expert, has found a way of getting a similar sort of arrangement - without the fee. He points out that you can order your currency in advance, with any company that allows you to cancel and get a full refund in pounds. If you order today for delivery in two weeks, then you lock in today's exchange rate. If the pound falls by the time you go to collect your cash, you're quids in. If it rises in the interim, you can cancel your order and buy at the new exchange rate.

He identified that Travelex (collection only) offers this service - provided you give at least 24 hours notice of cancellation. The Post Office offers it too (for collection and delivery). You can cancel at any time for collection, but to cancel for delivery you'll need to do so before it is posted out to you, and because you can't be sure exactly when this will happen, collection may be a safer bet.


As with any brilliant loophole, it's not guaranteed to work. Lewis points out that the Post Office says it reserves the right to charge a £20 cancellation fee - but doesn't always charge it. However, if too many people use the service, there's nothing stopping them implementing the charge.

There's also the fact that a number of these companies say in the small print that they can cancel orders if the pound moves too much - so if it was to fall too dramatically, the firms may decide not to take these losses on the chin.

You should also bear in mind that if you pay for your cash, but don't collect it for two weeks, then it is at risk for that period. If the company went under, you'd be very likely to lose your money.

Unfortunately, as with everything else in this process, it's very difficult to predict what will happen.

But what do you think? Will you be snapping up your holiday money? Let us know in the poll below.

Personal Finance Guru Martin Lewis tells Britons- "Remain"
Personal Finance Guru Martin Lewis tells Britons- "Remain"