Stranded abroad? Don’t wing it

Holidays from hell needn’t cost you the earth, says Ruth Jackson. A package deal provides the best protection.


Holidaymakers have had a torrid few years

Holidays from hell needn't costyou the earth. A package dealprovides the best protection.

In recent years we've seen several airlines and holiday firms go bust. Thousands of holidaymakers have been affected by the collapse of firms including Monarch, FlyBM and Low Cost Holidays. So how can you protect your summer holiday? The simplest way to ensure you have maximum consumer protection for your holiday is to book a package. With a package holiday, you book more than one part of your trip through the same travel agent or website.

Package holidays have full financial and legal protection. Known as ATOL protection, this means if your travel firm goes bust you are entitled to a refund. In cases where the travel agent goes under while you are on your holiday you can complete your trip and will be brought back to the UK. You are also protected if elements ofyour holiday aren't provided, for example ifa tour is cancelled due to bad weather.

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When you book a package holiday you should be provided with an ATOL Certificate confirming that you have full protection from the moment you pay even if you are just paying the deposit at that stage. Keep that certificate safe as it is your way to make a claim if you need to.

If you didn't book a package holiday you may still have protection if it is classed as a Linked Travel Arrangement. This is when you buy one part of your holiday, your flights for example, and then are prompted to buy another part, such as your hotel, within 24 hours but you have to re-enter your payment details.A Linked Travel Arrangement isn't covered by ATOL, but you do get insolvency protection. This means if one of the companies involved in your booking goes bust you can get your money back for that element of your trip.

A wise move when booking your holiday is to pay with a credit card. That way your trip is also covered by Section 75 of the Consumer Credit Act. This is a consumer law that says if you buy something worth more than £100 and something goes wrong for example your airline goes bust you can get a refund from your credit card provider. Paying by credit card is a particularly wise move if you are booking your holiday independently with separate flights, accommodation and car hire. These trips aren't covered by ATOL or Linked Travel Arrangements, but your credit card adds a layer of defence.

Top travel insurance tips

Almost of a quarter of us travel abroad without insurance, according to the Association of British Travel Agents (ABTA). Yet travel insurance is essential. The number of claims is steadily increasing, with one a minute in 2017 and £1m paid out every day. The average pay-out is nearly £1,300; medical expenses make up the majority of claims.

A common misconception is that if you are travelling within the EU you only need a European Health Insurance Card (EHIC). But EHIC only gives you the same free healthcare as a local. In some countries that amounts to little. It also doesn't cover the costliest part of medical claims getting you home.

Use comparison websites to find the best price for travel insurance but don't simply go with the cheapest option. Make sure you have at least £1m of cover for medical expenses in Europe and £2m outside Europe. Also check the baggage and belongings cover is enough for you. The Association of British Insurers (ABI) says the average family takes £3,000 worth of belongings away with them. If you travel more than twice a year an annual policy is probably better value than single-trip cover.

Pocket money... how Corbyn would pick your pocket

With a general election looking possible and Labour currently ahead of the Conservatives in polls, what would a government run by Jeremy Corbyn mean for your tax bill?"Prepare for a tax hit," says Mark Atherton in The Times. Two years ago Labour promised to reintroduce the 50p tax rate on annual income of more than £123,000. It also proposed the 45% rate coming in at £80,000. "This looks like a racing certainty for an incoming Corbyn government," says George Bull of RSM UK in The Times.Labour has proposed increasing Capital Gains Tax to 18% for basic-rate taxpayers and 28% for higher earners.

Meanwhile, your pension allowance could be cut, according to Danny Coxx of Hargreaves Lansdown. He also believes a Corbyn government could reverse the recent introduction of the nil-rate inheritance tax allowance for main residences.

Care home companies are still levying "exploitative" charges more than a year after action by the watchdog, says Sam Meadows in The Daily Telegraph. "One major provider is still breaching the guidance laid down by the competition regulator while two of Britain's biggest care operators have increased weekly fees to compensate for the loss of upfront charges."Last November the Competition and Markets Authority (CMA) released detailed guidance saying that post-death charges of more than three days could be breaching consumer law.

Of the five top care home providers three have reduced charges in line with the CMA's limits. Another was already at the limit but the fifth, Barchester Healthcare, has now cut the length of time it charges for, but still demands fees for a week after death. "This will be reduced only if the room is cleared of possessions and reoccupied before the weekhas elapsed."

Savers are losing out on an estimated £5bn in interest "because they keep their money in poor-paying easy-access accounts" says Ali Hussain in The Sunday Times.Around 82% of all cash savings is kept in accounts that allow you to withdraw your cash whenever you like without penalty. But the problem is that these accounts have an average interest rate of just 0.54%, according to Savings Champion."If just half this moneywere transferred to top-paying notice accounts that require three months' notice before withdrawing funds, savers could earn about £5 morein interest."

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.