First week back from holidays and already long, carefree, sun-drenched Lake Garda days seem like a very dim and distant memory. The perishing temperatures and permanent torrential rain of September in Britain aren’t helping, combined with the gloomy economic forecast, the rising cost of living and plummeting house prices.
I don’t think anyone’s feeing very chipper at the moment. The thought of another 9 months of this before next summer kicks in makes somewhere where you don’t need flippers to get to the supermarket seem very attractive..
Anyway, one thing I did notice, in preparation for my visit to Euro land, was the ease with which I was able to compare holiday currency deals. Although we have millions of Euros constantly washing through 4X, unfortunately they belong to our customers and are not available to me as holiday spending money. So I went on the rounds of the high street suppliers.
I tried, three – the Post Office, Marks and Spencer, and the little man round the corner. In each case the rates were clearly displayed in the window, as were the commission fees or lack of. There was quite a variance in the rates, but they were very easy to compare and I plumped very firmly for the little man who was giving a significantly better deal than the other two.
Now, I changed £500. The amount I saved by shopping around was probably about £25. Not much, but enough for quite a few Italian ice creams, and worth having. And yet, when it comes to much larger amounts, such as for an overseas property purchase or paying a business supplier, it suddenly becomes so much harder to compare prices.
Unlike Bureaux de Change, currency companies are not obliged to clearly display their rates of exchange, usually forcing customers through a lengthy registration process before quoting a dealing rate. With some 135 such companies in the UK, most of them claiming to give the best rate, this makes price comparison almost impossible.
The usual reason given is that currency prices move around so quickly that the dealer won’t calculate the quote until the customer is ready to do the deal. However, there is nothing to stop the customer asking how the price will be calculated.
Dealers quote a percentage away from the ‘inter bank’ rate (which can be found on BBC.co.uk, or teletext or ceefax). That percentage is their profit. Naturally this is not something they want to disclose, but if I were going to exchange hundreds of thousands of pounds would certainly want to know what the deal was.
You could either ask them how many ‘basis points’ away from the inter bank rate they will charge, or what percentage. That way comparison of rival providers is relatively simple, and when you come to do the deal you can check that is what you are getting.
The overseas property market has been somewhat in the doldrums over the last months. My bet is that this dreary autumn might start a few more people looking to sunnier climes. Shopping around for the best currency deals can mean having enough left over to furnish the place.
In the meantime, for those of us who can’t afford our villa in the Algarve just yet, I have a suggestion.
Why doesn’t the Government buy a smallish warm or tropical island. One of the Canaries would do. On a certain date, say September 5, the whole of Britain could be flown out to live there for the winter. It
might be a bit cramped, but we would be on the beach most of the time so it wouldn’t matter. They could then just turn Britain off and close the doors until spring.
Think of all the money it would save – on heating, lighting, cough and cold medicines – we’d all be rich and happy and healthy and then we could come back when the sun comes out. Just a thought, but it’s still raining and I think I’ll drop Gordon a line…
Where is that lovely Richard Farleigh of Dragon’s Den fame when you need him? We miss him. Well apparently he is alive and well and doing what he does best – investing in exciting technology ventures. To that end I have just dropped him a line – apparently he reads every email so I will be waiting with bated breath for him to get in touch. Come on Richard, you know you want to…
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