UK consumers’ ignorance around foreign currency exchange rates has been highlighted in a new study.
When more than 2,000 UK consumers were asked to convert £1 into its equivalent value in euros, only one in ten provided an accurate estimate at 1.4 euros.
Almost a quarter (23%) stated outright that they did not know.
Only 14% of those surveyed were aware that £1 is equivalent to $1.5, with 32% saying they did not know.
Asked to rate their own understanding of foreign currency exchange rates, more than half of UK consumers (55%) admitted to being ‘not knowledgeable’, and just 6% claimed to be ‘very knowledgeable’.
When responses were split by gender, a clear divide emerged, with men far more confident in their grasp of foreign exchange rates than women.
More than half (56%) of men claim to be ‘knowledgeable’, compared to just over a third (35%) of women. Men are twice as likely to rate themselves as ‘very knowledgeable’ about foreign exchange rates compared to women (9% vs 4%).
The research, conducted by YouGov for new industry body Dynamic Currency Conversion Forum, confirms that for the majority (62%) of consumers, cash is the most popular payment method when abroad, followed by credit/debit card (27%) and pre-loaded money cards (10%).
On average, Britons expect to spend £736 abroad over the next 12 months, excluding fights and accommodation. More than 20% of respondents expect to outlay of £1,000 or more.
DCC Forum chairman, Gino Ravaioli, said: “We know that Britons collectively make around 60 million trips abroad every year, and a strong grasp of foreign currency exchange rates allows travellers to be more financially astute when making overseas purchases.
“Consumers paying in a foreign currency can quite often lose track of their spending when abroad, and having a clear understanding of exchange rates helps to mitigate this.
“For travellers who don’t have time to research and understand exchange rates, dynamic currency conversion – a process in which consumers can pay in pound sterling at point of sale – offers transparency and peace-of-mind when it comes to budgeting.”
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