Peter Rexstrew, managing director of currency exchange specialists Premier FX, looks at how you can save money on your regular transactions.
"Even in improving times it is still good to look at ways of cutting down on living costs without it having too much of an effect on lifestyle. This applies especially to those who live on a fixed income, particularly one that is based on, say, a monthly pension, and involves them drawing euros out of a UK account to pay for their day-to-day living costs here in Portugal."
With almost all banks and building societies now charging a fee not only for bank transfers but also for the 'privilege' of withdrawing euros out of an ATM (or a hole-in-wall machine as they are commonly known), the costs can soon mount up.
The solution? Exchange sterling to euros via a currency specialist. Not only will you get a far better rate of exchange, given the volume that currency specialists trade at, but you won't be charged any commission.
The sums really do add up.
Take this for an example:
Let's say you make a regular monthly transfer of £2000 sterling from your UK bank into euros, either directly via your bank or courtesy of an ATM. The current exchange rate the bank will give you is 1.20. Add on a £25 transfer fee, and the amount you will receive in euros is 2,370.
Make the same transaction with Premier FX and we will offer you an exchange rate of 1.2400. With no fees payable by you, the amount you will receive in euros is 2,480.
That's a monthly saving of €110 and a saving over the course of the year of €1,320.
Another way to save is by forward contracts, where a rate can be agreed at a set price but not paid for until a later date. The euro-sterling rate is pretty good at the moment, and now could be a good time to look at forward contracts, especially if you have a sizeable currency exchange requirement planned for the foreseeable future – perhaps for a property purchase. The benefit of a forward contract is that the rate stays the same whatever the market volatility during the period, and it's a good way to plan your currency strategy if you're in the position to do so.
Nothing is certain in the world of finance and politics, even though it feels world economies are improving. Therefore, its always good to aware of the moves in the exchange rate, it could end up saving you money
UK: 11th Floor, City Tower, 40 Basinghall Street, London, EC2V 5DE, T: +44 (0)845 021 2370
Portugal: Rua Sacadura Cabral, Edifício Golfe lA, 8135-144 Almancil, Algarve, T: +351 289 358 511
Spain: Paseo Maritimo 12, Palma de Mallorca 07014, Mallorca, T: +34 971 576 724
Premier FX is fully registered with both HM Customs & Excise and the FSA (no. 530712) as a payment services institution
