Savers have identified holidays and travel as their key savings goal, our research has found.

The survey of over 2,000 active savers found that 33% cited holidays and travel as their main savings priority this year, more than any other reason.

On average, Brits plan to spend £1,942 on their main family holiday this year, compared to £1,908 last year. However, adopting some simple money saving tips can help your holiday money spread a lot further.

Get the right card for travel

A large number of banks and building societies will charge you if you use your credit and debit card overseas. The most common charges are foreign transaction fees, called non-sterling transaction fees, which can be up to 3%, exchange rates and flat fees every time you use your card to pay for an item or withdraw cash from an ATM, regardless of the amount.

If you are using your card for numerous transactions overseas, the extra charges can soon add up and eat into your holiday spending cash.

Some bank accounts offer debit or credit cards with fee free overseas transactions, whilst some even offer cashback on transactions. A quick online search can help identify the best cards for use overseas, so apply with plenty of time before your leave to ensure you get the account set up.

Another option is a prepaid travel card, which lets you load money and exchange different currencies before you travel. A couple of points to note with prepaid travel cards – your spending is limited to the amount you have loaded onto the card, plus many of the providers aren’t FSCS protected, so if they go bust it may be more difficult to reclaim your money.

Always choose the local currency

It’s a situation we’ve all faced when withdrawing cash or paying for goods overseas: pay in local currency or pounds sterling? In almost all cases, it’s cheaper to select the local currency.

This is because most transactions use something called dynamic currency conversion, where the conversation takes place at the point of sale. Shops and restaurants can set their own exchange rate to convert the amount you’re spending, and there are typically fees added onto this also.

The rate used by your card provider when paying in local currency will in most cases be lower than that of the merchant, or foreign bank, when paying in sterling.

Don’t get stung by mobile phone costs

Using your phone when travelling overseas can leave you with an unexpected bill when you return home, particularly if you use your phone to stream movies or use lots of data when abroad.

Post-Brexit, a number of mobile providers have reintroduced roaming charges, where your phone connects to the local network and the cost can soon build up.

There are some practical steps you can take, such as downloading the films, TV shows and music you plan to watch or listen to before you go. Switching off roaming and only using the Wi-Fi in your accommodation, restaurants or shopping centres is also a popular choice.

If you want to keep using your phone as normal, some mobile providers offer special travel passes, so it is worth contacting them to let them know you’re travelling, particularly if you’re travelling long-haul.

Alternatively, you can also buy a separate Sim card with no contract that allows roaming in Europe at no extra cost. There are also international eSims you can use when travelling to destinations further afield.

When in doubt, use a credit card

Credit cards are generally a safer option to use for purchases overseas. They benefit from Section 75 of the Consumer Credit Act, which means if there is a problem with your transaction (of between £100 and £30,000), the credit provider is jointly liable with the retailer.

Additionally, if your card is stolen or hacked when overseas, only the amount up to the credit limit can be taken, as opposed to everything in your current account with a debit card. Select a lower credit limit for the card you are taking with you overseas.

Pay for your insurance and car hire early

The first thing most of us think about when we have just booked our holiday is unlikely to be insurance. However, let the head rule the heart and get your insurance sorted as soon as you book your break – don’t leave it until the departure lounge! If you don’t, any cancellations or mishaps won’t be covered and you could be forking out for a holiday you cannot go on.

Check your bank account because some accounts include travel insurance for you and your loved ones. Some accounts also offer lounge access, so it’s always worth reminding yourself of the perks. 

Generally the earlier you sort out your car hire, the cheaper it will be. Again, pay with a credit card to benefit from the Section 75 protection, plus organise your car hire insurance before you travel. Don’t wait until you’re at the rental collection desk, and watch out for high pressure sales tactics.

Some other useful tips include:

• Pack light – most airlines now charge for baggage so keep your luggage to a minimum.
• Take advantage of rewards programmes – look for loyalty programmes offered by airlines, hotels and travel agencies.
• Don’t stay in the centre – accommodation prices increase the closer you are to the main tourist hotspots.
• Book early – flights are generally cheaper when they are first released. Also, look for airline sales.
• … But also book late – package holiday prices start to fall the closer to the departure date. If you’re brave and willing to sacrifice choice, you could land a bargain.
• Clear your cache when searching for flights – airlines are clever and know when you have searched for a flight. If you’re scanning flights, remember to clear your cache when you come to book so they think it’s a fresh search.