By Kate Brown
A recent study conducted by three technology companies including currency firm Transferwise, found that UK travellers are paying thousands in hidden fees when purchasing foreign cash. It is calculated that over a lifetime, the average UK citizen will pay more than £5,000 in hidden fees. Those who own holiday homes or retire abroad will pay far more.
Of the 8,000 surveyed, less than 50% said they were able to pick the best foreign exchange deals using the information provided by suppliers such as the post office, bank and bureaux de change.
Most foreign cash suppliers include a fee or commission charge as well as an exchange rate. However, most of the money made by suppliers comes from offering poor exchange rates. The market and wholesale rate that the suppliers purchase the currency at is not revealed to customers. Although this number can be found online at websites such as xe.com, most customers are not aware of this.
A representative from the government’s Behavioural Insights Team, Elisabeth Costa, said: “Small businesses and consumers in the UK are charged billions each year in hidden foreign exchange transaction fees. We found that adding clearer information, particularly total costs in pounds, greatly increased consumers’ ability to identify the best value deal.”