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Full podcast episode transcript
[0:09] Susannah Streeter: Hello and welcome to Switch Your Money On from Hargreaves Lansdown, with me, Susannah Streeter – Head of Money and Markets.
[0:14] Sarah Coles: And me, Sarah Coles – Head of Personal Finance.
[0:16] Susannah Streeter: So, Sarah, we are hurtling towards the summer holidays. I currently have three suitcases open – I always like to get a bit ahead of the game. I am so ahead of the game this year, they’re actually sending my two sons ahead of me. I’m hoping, by the time it actually gets to the day of departure, it will be a lot less stressful than I’ve been used to! Trying to get five in the car with all the luggage – thinking about where we’re going – this rolling format... I think I’m liking it so far.
[0:44] Sarah Coles: The way you’re describing it, it sounds incredibly stressful – but then, holidays actually can be really stressful. They’re supposed to be fun – they’re supposed to be where we relax – but the cost involved can be really difficult. And also, getting together with your family – having some of those conversations around the pool that can take a turn for the financial – if you’re with my family, anyway – and it’s part of what we want to discuss in this episode – really looking at the issues around holidays and money – and how you can make this a really positive time, where you move towards better finances, rather than running up some horrible holiday-money debts.
We’re also gonna speak to Helen Morrissey – our Head of Retirement Analysis – about why holidays are a great time to talk about retirement.
[1:20] Helen Morrissey: Yeah – thank you for having me – looking forward to it.
[1:23] Sarah Coles: So, I guess, the first thing to talk about is actually, fundamentally, ‘The cost of holidays.’
So, we looked at the figures from the Office for National Statistics – and it actually chose it as... if you were to break it down across the whole year, it’s about £23.80 a week – so that’s actually £1,238 a year per household. So, this does, of course, depend on where and when you travel – and, obviously, it includes a whole host of people who don’t go away on holiday. So, you can easily spend several thousand pounds taking a gigantic family away in the school holidays – so the cost of the holiday depends hugely on what sort of holiday and when.
But there are a huge number of people who are travelling overseas. About three-quarters of people are travelling overseas this year – and half expect to spend more on it than they did this time last year. So, I think we are aware that it’s stretching our money that little bit harder.
One of the things that it’s worth thinking about... So, I talked about spreading it over the year – and a lot of people will end up paying for the holiday throughout the whole year – but the question is, ‘Are you gonna be one of those people who puts it on a credit card, and then pays it off over the period of a year afterwards, and then pays a load of interest – and has all that worry about the debt?’ Or, ‘Are you gonna be one of these people who plans ahead – and is putting the money aside each month?’ Really easily... you can just put it into an easy-access savings account – you just drip-feed the money in. Make sure it’s a competitive account because you’re working really hard for your money, so your money needs to work really hard for you as well.
You can put that into something then as a regular savings account. So, these things last for a year – they tend to offer a higher rate than you get on other savings accounts. And one of the other advantages, of course, of saving – rather than borrowing – is that interest is working in your favour – so you’re earning interest as you go along. And we’ve talked before about compounding, but the miracle of compounding suddenly works in your favour, so you’re making money on your money as you go through the year, and then you’ve got more to spend when you go away.
[3:08] Susannah Streeter: Yes – so, rather than perhaps taking the option of giving the holiday companies more money upfront – because then, of course, you can’t benefit from that money sitting in your own bank account.
[3:18] Sarah Coles: Yes – you can book holidays on relatively small deposits – and, therefore, you’ve got this money in your savings, working very hard.
One of the other big elements – when it comes to holiday money – is actually how you spend when you go away. So, one of the things that’s happened – in relation to all the manoeuvres around the world – is global currencies have been rising and falling against each other.
[3:39] Susannah Streeter: Yes – so, for example, you take the dollar down 11% since the start of this year against a basket of currencies... people may be tempted to try and second-guess currency movements and where they’re gonna end up – and buy their money way in advance. The difficult thing with that is that world events can actually take over and the currency may not be on the same trajectory. So, there are a few things you can do – not least, perhaps buying your money in a few instalments.
[4:06] Sarah Coles: Yes – and, of course, bear in mind that how you spend that money has as much impact as the currency exchange rate at the time. So, if you take something like a credit card or a debit card that are designed for spending overseas... it’s worth saying some are designed for spending overseas, so there’s no fees for overseas – there’s no fees to take money overseas – out of a cashpoint.
Those are great things to use because they have really good exchange rates. You can’t time your exchange because the exchange happens at the moment when you spend – but, because those exchange rates are so good, they’re a really good way to travel. The worst possible way to travel, often, is to just use your usual credit card – or your usual debit card – without really thinking about it.
[4:41] Susannah Streeter: And, particularly, don’t take money out on your credit card abroad – you can get stuck with huge charges, can’t you?
[4:47] Sarah Coles: You can – there’s several different sorts of charges that you can get. They don’t just stop at one – they don’t just stop with having an overseas charge – there are lots of different charges you can have along the way, so it’s really important to think about it in advance.
And also, if you’re going to exchange money, it’s an old cliché, ‘Never exchange money at the airport.’ If you get to the end... you know, if you’ve been so busy packing your 84 suitcases, that you just don’t have time – you can pre-book currency at the airport and get a slightly better exchange rate – you’re still gonna be much better off if you’ve thought about it in advance.
[5:17] Sarah Coles: And also, when you talk about, ‘How you spend,’ it’s what you spend it on and how you’re budgeting during your holiday. It can be extremely tempting – can’t it? – to throw caution to the wind and think, ‘I’m just gonna eat out every single night.’
[5:29] Sarah Coles: Yes – and one of the things that can happen is this sort of... psychologically, we think differently about spending when we go away. So, we might think, ‘Oh, I’m on holiday – I think I’ll treat myself’ – and that can be things like going out and eating out – and it can be almost anything. You think, ‘Well, I’ll just spend a little bit of extra and it doesn’t really matter.’ And, actually, what happens is, because you haven’t factored this into your planning – you’ve set yourself a budget, and you’ve thought, ‘I’m definitely not gonna spend more than that’ – and then, of course, you go away, decide to treat yourself, and you bust the budget.
So, we know that the vast majority of people set a budget and then bust it. In fact, they spend almost half again – and that is even true when people are on all-inclusive holidays.
[6:04] Susannah Streeter: You get so fed up with the restaurant after about three days. I’ve only been on one inclusive...
[6:09] Sarah Coles: [Laughs]
[6:09] Susannah Streeter: ...holiday – and I’m not doing it again!
[6:11] Sarah Coles: What’s a really common thing that happens is that people get drinks included in the drinks package, and then they think, ‘Oh, I’ll just treat myself to a posh drink’ – and that comes in on top. So, ...
[6:20] Susannah Streeter: Mm.
[6:20] Sarah Coles: ...always worth... set yourself a budget – don’t bust it – don’t think, ‘Ooh, I’m going to treat myself.’ Think, ‘Okay – if I have to borrow to treat myself, how much am I punishing myself, further down the line, by having to pay it back?’
[6:30] Susannah Streeter: Very true.
[6:31] Sarah Coles: So, I would also say that, when you’re away, it’s a really good time to talk about money.
Now, obviously, you don’t wanna be sitting around, saying, ‘Oh, my God – I don’t know how we’ve spent all this money – and we’re going to run into horrible debt’ – ‘cause you just ruin the holiday for yourself – but there are some conversations that people should be having about money.
[6:46] Susannah Streeter: Really... what, lying by the side of the pool?
[6:49] Sarah Coles: Yes – absolutely. So, you’re spending more time with your partner and your family than you normally would – and, actually, that’s a really good time to think, ‘What is it that we like to do together?’ – ‘What is it that we want to spend our time...
[7:00] Susannah Streeter: Yeah – ...
[7:00] Sarah Coles: ...doing together?’
[7:01] Susannah Streeter: ...I do get that. Sometimes, though, you almost want to go on holiday to get away from it all – and not think about the pressures of life, which could include money. I suppose, it depends on how that conversation is being framed.
[7:11] Sarah Coles: From my perspective, when you go away... actually, that gives you that clarity of mind. So, it means that you can look not just at, ‘What are we spending on shoes?’ – and, ‘Oh, my goodness, how can we afford more pizza?’ – that sort of thing. It’s actually looking at those long-term things – so looking at retirement.
So, I thought it was a really good time to talk to Helen Morrissey – our Head of Retirement Analysis.
So, obviously, Susannah and I, ...
[7:31] Susannah Streeter: [Laughs]
[7:31] Sarah Coles: ...at odds here. I, obviously, want to talk about pensions as soon as I go away – Susannah, not so much – what about you?
[7:36] Helen Morrissey: Well, what else would you want to talk about...elenH
[7:37] Susannah Streeter: Pina Colada!
[7:37] Helen Morrissey: ...on holiday – quite frankly? Over a Pina Colada, talk about your pension, ...
[7:41] Susannah Streeter: [Laughs]
[7:41] Helen Morrissey: ...Susannah?! No – being honest, I think it’s a great opportunity to talk about your long-term planning – your retirement planning. And it can be hard in the day-to-day busyness of going to work, coming home, paying bills, etc, to really make a plan – or to know whether you’re aligned with your partner, for instance. So, I think that holidays are a great time to give it some serious thinking time – and some serious discussion time – albeit over a Pina Colada.
[8:11] Susannah Streeter: I do see what you mean – in that, often, you need the headspace to think about the longer term, don’t you?
[8:17] Helen Morrissey: I think it’s really important to take that time to talk to your partner – to make sure that you’re both on the same track when it comes to what you’re expecting from your retirement – ‘cause you might find that, what you’ve got in mind for retirement, your partner doesn’t necessarily have.
[8:34] Susannah Streeter: Or it might be that, actually, you’re with friends as well – and it could open your eyes to how they’re saving for retirement and how much they might have built up.
[8:42] Helen Morrissey: Exactly.
[8:43] Susannah Streeter: But it’s not always easy to talk about money – particularly around a dinner table, is it?
[8:47] Helen Morrissey: It’s not, but it’s time well spent – because it’s making sure [s.l. these 8:54] are aligned. I’ve spoken, in the past, about the importance of couples building up their own pension, for instance – and not relying on each other’s pensions – just because it means one partner is out of the loop of what the other one is doing – and I think it’s really important that, if you plan to hit retirement together, that you both know what the plan is – and that you’re both working together to achieve that. That could be how much you’re contributing to your pension – how much your partner’s contributing. ‘What age would you like to retire, roughly?’
You might wanna be out the door at 60 – whereas, your partner might be thinking, ‘No, no – I wanna start my own business – or go down to a three-day working week.’ There’s lots of big differences as to how you’re gonna spend your time – ‘How are you thinking of exiting the workplace?’ – it’s really important. And then, once you’re retired, how do you wanna spend your time? Because, for many couples, it’s probably the first time they’ve spent loads of time together – just you and them. There’s no children – I mean, there might be grandchildren – whatever – and this is why you often find a lot of older couples getting divorced. You see this rise of the ‘Silver Splitter’ because they’ve not really planned for that time together – and it can be very challenging.
[10:05] Susannah Streeter: On the other hand, there are those people who go on holiday and think, ‘I love this so much, I want to go and retire here’ – and it could be the other.
[10:12] Sarah Coles: I guess, the other thing about that is that you might think, ‘Oh, I’m loving this holiday’ – and you may, in your mind, think, ‘Oh, well, I must be going on loads of holidays when I’m retired’ – but, actually, if you’ve never had that conversation with your partner, that might not be part of the plan.
[10:23] Helen Morrissey: Exactly, ...
[10:24] Susannah Streeter: Or you...
[10:24] Helen Morrissey: ...so it’s so important.
[10:24] Susannah Streeter: ...might not have been on track at all to be able to do that. If you suddenly have this realisation that, ‘This is what I want my retirement to be like’ – ...
[10:33] Helen Morrissey: Yeah.
[10:33] Susannah Streeter: ...and you don’t want to work for longer... that might reinvigorate that concentration.
[10:39] Helen Morrissey: Absolutely – and it puts you both on the same path – you both know what you’re aiming for – and you can plan together. And, once you’ve got a sense of what you want your retirement to look like, you can then go about trying to work out how much that is going to cost – and I think that’s really important.
You might make some resolutions that, once you’re back from your holiday... that you’re gonna log into your pension to see exactly how much it is that you’ve got. Can use your online pension calculator – they’re really good for modelling how much your current pensions are gonna get you. If you decide to boost those contributions, it can tell you how much extra that might get you as well – and it can really open your eyes to what you can actually do to boost your retirement planning. So, I would say it’s a great way to spend your time on hols.
[11:25] Susannah Streeter: Save all that money that you’re going to be splurging on those extra restaurant meals that you haven’t budgeted for to put into your pension – you’re kind of convincing me.
[11:34] Sarah Coles: So, if somebody was to go through this process... I’m not, necessarily, suggesting they’re gonna power-up their pensions calculator by the pool – but, to make people feel more positive, are there any easy-wins that they might be able to do when they get home?
[11:45] Helen Morrissey: Yeah, I think so. I think the first thing you need to do is see if you’ve lost any pensions during your career – because, particularly now, with auto-enrolment... we all move between different jobs during our career – you might have picked up a pension in all of those jobs. As you move house, you might not update your contact details... it means you lost track of a pension – and that could be a pension worth tens of thousands of pounds – hidden away somewhere – that you could be making use of in your retirement planning that you weren’t aware of.
So, what I would say is... make a list of everywhere you’ve worked – check to see if you’ve got pensions paperwork. If you don’t, go to the government’s national pension tracing helpline. All you need is either the name of the employer or the pension provider – they can give you contact details – you can try and track that pension down.
Once you’ve got all your pensions together, you might decide to consolidate and give yourself one overarching view of what you’ve got – it can really boost your retirement decision-making.
[12:44] Sarah Coles: I suppose, if someone’s planning to bring it all together, you do need to think about certain things when you’re doing that.
[12:48] Helen Morrissey: Absolutely. So, what I would say is... make sure – in your haste to consolidate – that you’re not inadvertently racking up exit fees, for instance – that you weren’t expecting.
There’s also some really good benefits, particularly of older-type pensions – such as guaranteed annuity rates – that you might lose if you consolidate into one larger block. What I would also say is that, if you have a Defined Benefit Pension, it very rarely makes sense to transfer out of that – just because of the guaranteed income involved.
[13:19] Sarah Coles: But, I suppose, once everything’s all in one place – and you know what you’re aiming for – then, by the time you go on holiday next year, you might be already making plans for your retirement.
[13:26] Helen Morrissey: Absolutely – but what I would say with that is that you can’t access your pension until at least the age of 55. That is now going up to 57 in 2028, so bear that in mind with your plans – that’s really important. And, if you need any further support with your retirement planning, there’s an amazing government-backed guidance service called Pension Wise – that can give you a lot of information that can really help you.
[13:49] Sarah Coles: Fantastic – well, thank you very much – it’s gonna give me plenty to talk about when I’m on holiday.
[13:51] Susannah Streeter: You could always listen to this podcast by the pool, of course.
[13:53] Sarah Coles: [Laughs] Of course – I assume that’s what everyone’s doing!
[13:56] Susannah Streeter: Hm!
[13:56] Sarah Coles: Before we go, we do have time for our stat of the week.
So, the Post Office Money does a huge survey every year – and so, this year, I want to know... what was named as the most cost-effective destination? – and I’m gonna give you some options.
So, it is Thailand, Turkey, or Spain?
What d’you think, Susannah?
[14:13] Susannah Streeter: Well, looking at my social media feeds, it does look as though more people are heading to Turkey than they were this time last year. So, I’m wondering whether it’s Turkey.
[14:27] Sarah Coles: Okay – and, Helen, what d’you think?
[14:29] Helen Morrissey: I, genuinely, have no idea – I’m just gonna plump for Spain.
[14:35] Sarah Coles: Ah – well, Helen’s right.
[14:36] Susannah Streeter: Oh, really?
[14:37] Sarah Coles: My first choice would immediately have been Turkey as well – but, no, Spain was actually voted as the most cost-effective destination. So, I think, immediately, get yourself off to Spain – and think of it as a way of saving money.
[14:46] Susannah Streeter: Yeah – not Pina Coladas – you’ve gotta go for Sangria!
[14:49] Helen Morrissey: Absolutely!
[14:50] Sarah Coles: [Laughs]
[14:51] Susannah Streeter: Thank you for listening. Before we go, we should say that this was recorded on 14th July 2025 and all information was correct at the time of recording.
[14:59] Sarah Coles: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Pension rules can change and benefits depend on individual circumstances.
[15:05] Susannah Streeter: Yes – this is not advice or a recommendation to buy, sell, or hold any investment. No view is given on the present or future value or price of any investment and investors should form their own view on any proposed investment.
[15:14] Sarah Coles: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.
[15:20] Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research. However, HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.
[15:32] Sarah Coles: You can see our full non-independent research disclosure on our website for more information.
So, all that’s left is for us to thank Helen Morrissey for coming into the studio and our Producer, Elizabeth Hotson.
[15:39] Susannah Streeter: Just time for me to go get packing.
Thanks very much for listening – we’ll be back again soon. Goodbye!
[15:45] Sarah Coles: Goodbye!
[15:45] Helen Morrissey: Goodbye!