The cost of holidays is soaring. Is Brexit or Covid to blame?

Car hire

The cost of renting a car abroad has risen about 135 per cent in three years, according to the consumer group Which?

It compared the prices for a week’s rental over Easter this year and in 2019 and found that the average cost was up from £119 to £280. Travellers had to pay £600 a week for a Fiat Panda in Mallorca, £734 for a Skoda Octavia in Rome and £764 for a Ford Escape in Florida.

The insurer and comparison site iCarhireinsurance looked at the price of hiring a VW Golf or Peugeot 308 from Sixt, Hertz, Avis, Budget, Enterprise and Europcar for a week from May 28 to June 4 this year and in 2019. It found that average costs had risen from £351 to £504 in Nice; from £175 to £414 in Barcelona; £203 to £359 in Faro; £154 to £257 in Larnaca and £122 to £187 in Tenerife.

Many car hire firms sold vehicles during the pandemic to cut costs, but have struggled to rebuild their fleets because of car production shortages. This has pushed up costs and caused huge waiting lists for vehicles, all of which have added to the rental charges.

: Covid

What can you do?
Book well in advance because this makes a vast difference to the price. And be careful with extras – iCarhireinsurance found that adding an additional driver cost an average of £61, a child car seat £58, a sat-nav £82 and extra insurance to cover you for any damage £177.

Bring your own car seat and sat-nav if you can. You can buy child booster seats that double as rucksacks from companies such as Trunki for £54.99.


Avoid buying excess or waiver insurance offered over the counter at the car hire desk — get a stand-alone excess policy online before you go. Prices range from £37 to £70 for a year’s cover in Europe and you can also buy single trip policies. Cover for a week in Spain costs £12 to £35, according to Which?

Questor Insurance has £24 cover for a week in Spain, insurance4carhire charges £36 and Zurich £28.

Travel insurance

Insurance, particularly for those aged over 70, has also gone up. The consumer site Compare the Market said that average annual multi-trip policies for the over-70s went up 32 per cent in the 12 months to March 1, from £191 to £252. The average price for a traveller aged 55 to 69 went from £66 to £91, while a 25 to 34-year-old paid an average of £41 compared with £33. The cost of cover for a child under 16 cost an average of £36, up from £27.

Chris Rolland, the chief executive of the insurer All Clear, which has three million UK customers, said that it has had to factor Covid into the cost of cover. Inflation is also having an impact — rising prices for pretty much everything are being passed on to customers.

: Covid

What can you do?
Shopping around is crucial, but the cheapest policy may not be the best. If things go wrong you need to be able to get hold of your insurer so also look at its customer service ratings (try; its accident claim limit; the size of the excess you will have to pay on any claim, and whether it covers redundancy, bereavement or serious illness.

Although we have left the EU, its European Health Insurance Cards are valid until their expiry and after that there is the replacement Global Health Insurance Card, which entitles you to emergency or necessary medical care in the EU, Switzerland, Iceland, Norway and Liechtenstein. It is free and you can order it through (Watch out because the government has warned about scam sites that look like the official application page.)

Debit and credit cards

Debit and credit card firms used to offer fee-free spending and cash withdrawals abroad — not any more.

Now there are generally three charges you pay: a withdrawal fee from your bank for using a cash machine (the cash machine may also charge a fee); an interchange fee charged by Mastercard and Visa for online transactions with an EU company, and an overseas transaction charge levied by your card company.


When Britain was in the EU it was part of the single Euro payments area, which allows bank transfers with no fees. Since Brexit, Mastercard and Visa have charged EU retailers 1.5 per cent of the transaction value for every online credit card payment they take from British cards, up from 0.2-0.3 per cent. This will affect hotels, when you book with them online, and they will probably pass on those charges to you.

Mastercard and Visa also charge retailers for taking payments with British debit cards and these fees have gone from 0.2 per cent to 1.15 per cent. It’s likely that many retailers will pass these charges on to British customers.

Credit Agricole, France’s second biggest bank, has a €5 (£4.33) charge on withdrawals made from its ATMs with UK-issued credit and debit cards. It also charges €18 (£15.57) fees on any bank transfers coming from Britain. Other banks in the EU may follow, so check before moving your money.

Some British citizens living in the EU had their UK credit cards withdrawn because some UK banks decided not to apply for the banking licences that they now need to offer services in the EU since Brexit.

There are other punitive changes to credit card spending that have nothing to do with Brexit. Credit card companies including Aqua, Bank of Scotland, Halifax, Fluid Lloyds, Marbles and Opus all increased their charge for withdrawing cash abroad from 3 per cent to 5 per cent last summer, according to the consumer group Fairer Finance. It means someone withdrawing £200 of foreign currency would be charged £10, up from £6.

And it’s not just the fees you need to worry about. So far this year the pound is down 7.4 per cent against the dollar and 1.86 per cent against the euro. Since the Brexit vote of 2016, it has dropped 9 per cent against the euro.

The falls are driven by worries about the growth of the UK economy.


Robert Salter from the accountancy firm Blick Rothenberg said: “While one cannot 100 per cent say that this is because of Brexit, realistically this will be at least partly a result of Brexit,” he said.

: Brexit

What can you do?
Credit and debit card deals can help to mitigate the extra costs you face abroad. The digital bank Chase offers 1 per cent cashback on its debit card for the first 12 months home and abroad. Starling Bank and Virgin Money’s Mastercards offer free spending and cash withdrawals around the world.

If you use Monzo as your main bank account, or have Monzo Plus or Monzo Premium accounts, then cash withdrawals with the Mastercard are fee-free.

Halifax Clarity card has no fees on overseas spending or cash withdrawals, and new customers get £20 cash if they spend £1,200 in the first 90 days. Nationwide’s Member Credit Card has no charges on foreign spending.

The Revolut Mastercard works like a normal bank card and cash withdrawals overseas will be calculated at the interbank exchange rate, which is what banks charge one another and is lower than general retail rates. You can withdraw up to £200 a month, fee-free from ATMs overseas. Any other withdrawals come with a 2 per cent charge.

Prepaid travel cards, also known as currency cards, allow you buy foreign currency and hold it on your card. The Revolut card also allows you to do this. It means that you can buy currency when rates are good and keep them until you go on holiday. There are single or multi-currency options, and most will give you the interbank exchange rate.

Watch out because some prepaid cards come with extra charges for applying, making regular top-ups, using ATMs or not using your card for an extended period of inactivity. The consumer group Which? recommends the Asda money card, Caxton and Easy FX cards, which allow you to hold more than 14 currencies and have low charges and competitive exchange rates.


If you wait until the last minute and change your money at bureau de changes it can cost 30 per cent more than ordering currency before you go.

The Post Office, Asda and Tesco all offer consistently good exchange rates.

You need to get an animal health certificate from your vet at least ten days before you travel



Pet passports issued in Britain (not Northern Ireland) are no longer valid for travel to EU countries, so you will have to get an animal health certificate from your vet at least ten days before you travel. To get the certificate your pet has to be microchipped, vaccinated against rabies and wormed.

The certificates are between 10 and 14 pages long and cost about £150, although costs vary between vets. You will have to pay for the jabs and treatments on top. A rabies shot usually costs about £50, worming about £30 and microchipping between £10 and £15, according to the consumer site Compare the Market.

The certificate lasts four months and is valid only for a single trip to the EU.

This is all down to Brexit, but Covid has made it worse because the surge in lockdown pets means that many vets now have waiting lists.

: Brexit

What can you do?
Every vet sets their own price for the certificates, so shop around. If you own a second home in the EU, you may be able to get an EU pet passport issued by that country via a local vet. See for a guide to taking your cat, dog or ferret abroad.

Mobile phones

In 2017, roaming charges for using your phone in the EU were abolished, meaning customers paid the same amount for making a call, sending texts and using data while travelling as they did in the UK.

Since Brexit, charges are back, most notably with Vodafone, EE, Sky and Three. Vodafone customers who renewed their contract or joined the company after August 11 have had to pay a flat fee of £2 a day in the EU to use their usual call, text and data allowances abroad.

Roaming with EE also costs £2 a day. With Three it is £2 a day in the EU and £5 worldwide.

: Brexit

What can you do?
You could switch mobile phone company: O2 is the only leading UK network not to have introduced roaming charges. Giffgaff does not have roaming charges in the EU for UK residents.

EE customers can pay £10 to avoid roaming charges for 30 days. Vodafone customers can buy an £8 roaming pass for eight days (saving you £8 on the usual £2 a day roaming cost), or a £15 pass for 15 days (saving you £15). Frequent travellers should consider a contract that has roaming charges included.

If you’re a frequent traveller, or are going away for longer than usual, you could get a prepaid Sim card to put into your phone, so you will need to make sure your phone is unlocked, and you will have a different number.

The biggest firms selling global Sims are WorldSim and TravelSim, which offer a range of Sims for use in Euope or worldwide. WorldSim cards are usable in 100 countries and free if you buy £100 worth of data and calls, £15 if you add £20 of credit, £10 if you add £30 of credit and £5 with £50 of credit.

TravelSim’s international Sim costs £8 and is usable in 135 countries. You add credit on top, which is valid for a year. It also offers a £4 basic eSim usable in 100 countries, and a £37 European Sim package with 5GB of data and 60 minutes of calls.


From next May, travellers going to the EU will have to register with the European Travel Information and Authorisation System. The form, — a bit like the Esta that you have to complete before heading to the US costs €7 (£6) and will be valid for three years. You’ll need to apply at least 96 hours before travelling.

If you’re planning to stay for longer than 90 days in a 180-day period you will need a visa. Each country has its own and can be slow to authorise them.

Apply three months before you travel from the consulate for the relevant country. They cost between €75 (£65) and €100 (£86). You will need proof of accommodation and to show that you intend to take out medical insurance and will not be a financial burden with some evidence of income or cash in a local bank account.

: Brexit

What can you do?
Pay the €7 or start planning for that staycation.