Money blog: Cheapest long-haul holiday destinations revealed (2024)

Essential reads
  • The rise of 'forever games', the battle for consumer culture and what it tells us about Gen Z
  • Tips, maternity pay, and UK de-industrialising faster than other developed nations - what you need to know from the week
  • Three million people 'face retirement crisis in less than 20 years'
  • 'I own home worth £400k. Will my son pay inheritance tax?'
  • Best savings rates right now

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09:55:03

Cheapest long-haul holiday destinations revealed

Far-flung holiday destinations that won't break the bank are difficult to find.

That once-in-a-lifetime bucket list trip always appears out of reach.

But if you put in the research - it is possible to plan a breakaway that not only ticks all the boxes, but promises value for money.

Top of the list in a new report is a country known for its sun-drenched beaches, wines and stunning landscapes - South Africa.

It has regained its position as the best value long-haul holiday destination for UK travellers.

Local price falls and the weakening of the South African rand have brought costs down for UK visitors by 12% since autumn 2023, according to Post Office Travel Money.

Its annual study looks at different factors including the price of a cup of coffee, a glass of wine and three-course meals.

This makes Cape Town the best value out of 32 resorts and cities analysed in the report for the first time since 2018.

Typical prices include £1.63 for a cup of filter coffee, £1.81 for a bottle of local beer, and £33.31 for a three-course evening meal for two with a bottle of house wine.

Second on the list is Tokyo in Japan, followed by Vietnam's Hoi An, which took top spot last year, and then Bali in Indonesia which remains in fourth position.

Mombasa in Kenya, Delhi in India, and Sharm el-Sheikh in Egypt are next in the table, trailed by the Sri Lankan capital Colombo, Santiago in Chile and Montego Bay in Jamaica.

At the other end of the table, the most expensive - with tourist staples costing nearly three times more for UK visitors than in Cape Town - is Sydney, Australia.

A surge in sterling's value against most long-haul currencies means UK holidaymakers planning winter sun breaks can expect to pay less than a year ago in more than half of the destinations surveyed.

Laura Plunkett, head of travel money at Post Office, said: "Our research revealed wide variations in the cost of tourist staples across the 32 destinations we surveyed.

"Holidaymakers could save themselves a lot of money and make a big difference to the overall cost of their winter sun trip by doing some basic holiday homework before booking to find out where meals, drinks and other staples are going to cost the least."

07:14:20

The rise of 'forever games', the battle for consumer culture and what it tells us about Gen Z

By Brad Young, Money team

Selling games for £60 is no longer how the gaming industry makes money.

Loyal gamers willing to spend big on in-game purchases have become the industry's most lucrative customers, leading developers and publishers to make continually updated "forever games" that are free or cheap to access.

It's a story that matters because it's having a huge impact on those producing games - but it also tells us a lot about how our society is changing between generations.

In this piece, we also look at what's next amid a prediction that gaming could soon rival social media as the main online platform for consumer culture.

The money - and Gen Z's different demands

Forever games are more commonly referred to as "live service" and encourage players to become part of a lasting, multiplayer, online community.

Publishers profit from players' continued engagement via in-game spending on things like character outfits, consumable items, season passes and subscriptions.

Last year, in-game purchases accounted for 67% of global games revenue, or £94bn, according to MIDiA Research, a media and technology insights firm.

The proportion of that cash spent on character cosmetics alone, £54bn, dwarfed total direct game sale revenues, £29.4bn.

"Gamers that grew up as real digital natives, let's say Gen Z and younger, have very different reasons for why they play games compared with the older segments," said Karol Severin, senior games analyst and VP of data at MIDiA.

Some 27% of players aged 16 to 30 say they play to socialise, compared with just 12% of gamers aged 51 and older, according to MIDiA data shared exclusively with Sky News.

Their survey of 10,000 gamers worldwide found 62% of older consumers chose to play for "me time" – compared with just 38% of younger players.

Among those developers reacting to this shift is Crytek. Once a bastion of one-time purchase blockbusters like Far Cry and Crysis, the company has turned to a live service project, Hunt: Showdown 1896.

In August the company chose to release a massive update for the competitive, 19th century horror-shooter for free, rather than as a paid sequel.

David Fifield, general manager of Hunt, said maintaining its user base - and, in turn, the quality of the community - was behind the decision.

He likened paid sequels to kicking customers out of a concert and charging them admission again to come back for the second half.

"And a music festival with 10,000 people, that's like: 'This is all cool and I feel like I'm part of a good crowd.'

"Whereas if you went to the same park and there's only 900 people, you'd be like: 'What am I even doing here?'"

Connected to young gamers' desire to socialise is their appetite for self-expression online.

They are just as likely to define themselves by the clothes their online avatar is wearing as previous generations did by the cars they drove or gigs they went to, said MIdiA's Mr Severin.

Dressing up for an evening with friends can now take place in a virtual world, not just a real one.

"What kind of avatar they are wearing in Fortnite is a part of expressing who they are," he said.

It's a view shared by David Fifield, whose team has created hundreds of purchasable weapon skins and characters with distinct outfits to meet this demand.

Ever-increasing costs

At the same time, the cost of making games is "ever-increasing", explained Maria Sayans, an industry veteran who oversaw the launch of EA blockbusters like Battlefield, Mass Effect and Dragon Age.

"As a game developer, as somebody who's going to invest millions of pounds on making a game, all the incentives are there for you to try to extend that gameplay and really create more community around it."

Ms Sayans, now chief executive of one of the smaller studios reckoning with this challenge, Ustwo games, continued: "When you make a free-to-play game, every single second that the player is in the game is being geared towards retention and/or monetisation. The whole design is around those mechanics."

"It used to be enough to make a good game, that's not enough anymore," she added.

The catch

The problem is players have run out of new time to capture, said MiDIA's Mr Severin.

"Today, if you want to grow time spent as a game, you basically need to dethrone time that's already allocated to another app," he said.

This intense competition makes it much more difficult for smaller developers to break through.

Dr Richard Wilson OBE, head of the Independent Game Developers' Association (TIGA), who was honoured for his services to gaming, said: "These [live service] games are designed to keep players engaged over long periods, which can make it difficult for new or single-player games to stand out, especially those with shorter, narrative-driven experiences."

In this climate - and with rising costs - investors are more risk-averse, he said.

Almost half (48%) of studios founded between 2008 and 2018 failed before their fifth year, according to a TIGA report.

It's a concern to the gaming community, says Texan Twitch streamer Deejay Knight, a US air force veteran who swapped the rifle on his back to make a living filming with virtual ones.

"I stream hours of gameplay a day and I still don't have the time to play all the games that I want to play," he said.

"How many live service games can the industry sustain at once?"

The streamer adds: "There's going to be, probably, a reckoning in the gaming industry."

What's next? A battle for consumer culture

How games keep players engaged will evolve, according to MIDiA's Karol Severin.

Consumers should expect to see gaming companies attempt to steal time spent on social media platforms.

Mr Severin said: "I'm talking about things like hosting music concerts inside games, premiering TV shows and movies inside games, doing more across entertainment IP spinoffs from games to movie, from movie to games, etcetera."

Games will increasingly build in features that allow players to create and distribute content within online worlds, he said.

"Over the next decade, the biggest battle for engagement and consumer culture - hosting it anyway - is going to happen between social media and games."

17:44:21

Tips, maternity pay, and UK de-industrialising faster than other developed nations - what you need to know from the week

ByJimmy Rice, Money blog editor

We begin our round-up of the week with the backlash that followed Tory leadership contender Kemi Badenoch'sclaim that statutory maternity pay in the UK was "excessive".

The shadow housing secretary later backtracked, telling Sky News she believed maternity pay was "a good thing".

We made it the subject of this week's Basically..., which examined how UK maternity pay compared with other countries.

The UK is ranked very differently on two different measures of maternity pay in the OECD (Organisation for Economic Cooperation and Development) - a 38-member group which looks at economic and social policy.

When it comes to overall pay, the UK sits towards the bottom of the pack - but it's near the top when measured on the length of paid time women have the right to take off...

It was a momentous week in UK industrial history, with the closures of the last blast furnace at Port Talbot and the final British coal-fired power station at Ratcliffe-on-Soar.

Ourdata and economics editor Ed Conwaylooked at why the country is de-industrialising faster than nearly every other developed nation...

Restaurants are now banned from withholding tips from staff under new rules that came into force on Tuesday.

The rules apply across the hospitality industry and to any business that allows tipping.

It means more than two million workers will be able to keep an estimated £200m a year that is paid in tips, gratuities and service charges.

We covered the story here...

Britons have been used to seeing energy prices fall in over the last year as the cost of living crisis has eased, but this week brought an uptick.

The price cap rose on Tuesday, up £149 to £1,717 a year for a typical household in England, Wales and Scotland.

We looked at how you can beat the rise here (there's also a handy table of average costs for each household appliance)...

Finally, if you're interested in the housing market, here are three essential reads from the week...

We'll be back with live updates on Monday morning - and don't forget our Saturday long read on "forever games" from 8am tomorrow.

15:36:11

Gordon Ramsay protégé picks favourite budget eats - including a battered sausage and Bisto

All year for ourCheap Eatsfeature we've talked to chefs across the UK, from Northern Ireland to Norfolk - and this week our focus has been on London.

This afternoon we speak to our ninth and final chef of the week -James Knappett, chef-patron of two Michelin-starred Kitchen Tablein Fitzrovia.

You can now check out all 21 of this year's London chefs in one place here.

Hi James, can you tell us your favourite places to get a meal for two for less than £40?

Hala is a neighbourhood Turkish restaurant in Green Lanes that we often visit as a family of four - sharing a mixed grill platter between us. It's great value for money and always open late, so I can usually get a grilled shish on the way back home after service too.

New Loon Fung Restaurant for dim sum in Chinatown - for their steamed ribs, chicken feet, prawn dumplings and chicken and sausage claypot rice.

This one isn't London but there's a fish and chip shop in Ely calledThe Fish Housethat I make sure to visit whenever I head home to Cambridgeshire. I'm from Soham, so Ely is the closest city and The Fish House has consistently served up great food over the years. My order is a small cod and chips, plus a battered sausage, mushy peas and curry sauce.

What is your go-to cheap eat to cook at home when you have a night in?

A roast chicken with Paxo stuffing and roast potatoes and vegetables.

My tip is to pour all the drippings from the chicken into your Bisto gravy to enrich its flavour.

How did you get into cheffing?

As a child I wanted to grow up to be a policeman. I probably watched too many movies - it was the 80s, so films like Die Hard and Police Academy were popular. But once I finished school I decided to pursue an interest in food - starting out very young with my first professional experience in 1999 at Restaurant Gordon Ramsay on Royal Hospital Road.

I met Gordon by chance in a hotel and asked him "How do I get a job in your kitchen?" He told me to turn up at the back door, so that's what I did. I got the train in from Soham (where I was living at the time) and knocked on the restaurant's back door. There were a few other guys there but I did a trial, and landed the job.

We've spoken to lots of top chefs - check out their cheap eats from around the country here...

15:25:53

Three million people will 'face retirement crisis in less than 20 years'

Nearly three million pensioners will not have enough to cover their essential costs by the early 2040s, a leading thinktank has suggested.

In the next five years, the majority of people who save through a defined contribution pension will enter retirement will less money than they need for a basic standard of living, Phoenix Insights said.

This number will peak by 2040, when three in five savers, nearly 2.67 million people, find themselves in the same position.

Full-time working women born in the 1970s, earning below £80k and expecting to retire between the ages of 66 and 70 will be the hardest hit, the analysis found.

According to the Pensions and Lifetime Savings Association, the minimum amount needed per year in retirement is £14,400 for one person and £22,400 for a couple.

The minimum standard is defined as having enough to cover essential costs, with some left over for additional spending, including a holiday in the UK.

Patrick Thomson, head of research analysis and policy at Phoenix Insights, said the analysis paints a "bleak picture" of future retirement incomes.

"There is an urgent need to address undersaving to better support people achieve financial security later in life," he said.

He suggested a plan to increase minimum auto-enrolment contribution rates, when economic conditions allow, could be a solution.

"This should go hand-in-hand with policies to make work more sustainable and accessible for the over-60s, so people can continue to earn and save later in life," he added.

"These really aren't tomorrow's problems anymore."

14:48:13

Pension change that saw married women miss out on payments investigated

An investigation has been launched after a pension change saw married women miss out on thousands of pounds.

If successful, the probe by the Parliamentary Ombudsman could cost the government hundreds of millions of pounds in state pension arrears.

A long-running campaign by LCP Pensions claimed an "archaic and sexist system" had caused a large group of women to lose out on payments.

Prior to a rule change in 2008, married women could claim a state pension when they turned 60, initially being awarded a pension based purely on their own record of national insurance contributions.

If they had spent time at home raising a family or had interruptions in their work history, this amount could be as low as 25% of the full basic pension.

When their husband drew his state pension, they could get an uplift to a 60% pension based on his contribution - but this only happened if they made a further state pension application.

LCP Pensions said thousands of women did not know they had to apply again and, if they found out about the uplift later, they were only allowed to backdate the increase for a year.

Another issue was that for women to be told how to apply, their husband had to select a box on his statement pension pack.

If he didn't tick the box, a form wouldn't be sent for his wife to fill out.

Since the rules changed, this uplift has been applied automatically.

LCP partner Steve Webb has been campaigning about the issue for years, and said the investigation was a "major milestone".

"In my view, these women fell victim to a fundamentally sexist and archaic system which relied largely on married men ticking boxes and passing on claim forms to their wives," he said.

"The women I have spoken to are all intelligent people who do not ignore official correspondence and who would clearly have claimed their uplifted pension if they had realised a second claim was needed once their husband retired.

"The fact that they did not know this was needed indicates a system which let them down and has cost them in many cases thousands of pounds through no fault of their own."

13:20:01

Britons nervous about spending ahead of potential budget tax rises - Sainsbury's boss

Britons are nervous about big-ticket spending as they wait to see what will come in the autumn budget, the boss of Sainsbury's has said.

Chief executive Simon Roberts told Reuters people are being cautious about spending on more expensive items as the government is widely expected to announce tax rises on 30 October.

"Discretionary markets continue to be difficult," said Mr Roberts, a more than 35-year veteran of the UK retail sector who has run Britain's second-biggest supermarket chain since 2020.

"Consumers inevitably are wanting to be clearer about what's going to happen next and for that reason we see a continued caution in discretionary spending."

Chancellor Rachel Reeves claims cuts and tax rises are needed to plug a £22bn black hole in finances left by the Tory government.

12:15:47

'I am a widow and have a property valued at approximately £400,000. Will my son have to pay inheritance tax?'

Following our explainer on ways you can prepare your family finances for inheritance tax rises, we received at least a dozen questions from readers asking if their estates will be subject to the tax.

For example...

I am a widow aged 80 and have a detached property valued at approximately £400,000. My son will inherit my house. Will he have to pay inheritance tax?

Shaz

We've put together some information that will hopefully not just answer this, but cover the basics for anyone with a similar question...

When do you have to pay inheritance tax?

Inheritance tax is due when you leave an estate valued above a certain threshold to your loved ones when you die.

There is no tax if your estate's value is below the £325,000 threshold or you leave your estate to your spouse or civil partner, or an exempt charity or group.

The tax is currently charged at 40% - but only on the part of the estate that lies above the threshold. To use Shaz's figures as an example, if someone's estate is worth £400,000 when they die, then £75,000 of that estate would be taxed at 40% (£30,000 total tax).

Passing on a home

The rules are largely the same when it comes to passing on a home when you die.

If you're giving it to your spouse or civil partner there's no tax to pay, though it'll count towards the value of the estate if it is being passed to another person in your will.

However, if you fully or partially own your home, your tax-free threshold can increase to £500,000 if you leave it to your children or grandchildren, or your estate as a whole is worth less than £2m.

So, Shaz - your son may not have to pay.

There's normally no tax to pay if you hand over the home before you die, and live for another seven years or more.

Bear in mind that if you are married or in a civil partnership, any allowance you don't use can be added to your partner's allowance when they die.

This means a couple can pass on as much as £1m without their estate being subject to inheritance tax.

Are there any reliefs or exemptions?

You may be able to claim relief on gifts you give while you're alive which are eligible to be taxed after your death.

A "taper relief" comes into effect if you lived for a certain number of years after giving the gift. The gifts are taxed on a sliding scale ranging from 32% if you lived for three to four years, to nothing if you lived for seven or more years.

You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate. This is known as your "annual exemption".

There are other reliefs available too:

  • Small gift allowance:This lets you give as many gifts of up to £250 per person as you want throughout the year - you'll just need to make sure you haven't already used any other allowance on the same person;
  • Weddings and civil partnerships:If you want to help out someone who's getting hitched, you can give up to £5,000 to a child, £2,000 to a grandchild or £1,000 to any other person, tax free;
  • Regular payments:You can make tax-free payments to someone to help with their living costs, so long as you can afford the payments after meeting your monthly living costs and it comes from your regular monthly income.

When is the tax due, and how is it paid?

Inheritance tax is due within six months after the donor's death. If it's not paid by this time, the amount to be paid will start accruing interest according to the Bank of England's base rate.

Funds from the estate are used to pay the tax to HM Revenue and Customs. This will be done by the person dealing with the estate, known as the "executor" if there is a will.

11:37:18

Santander launches cheapest mortgage on entire market

Santander has today launched the cheapest mortgage on the UK market.

Moneyfacts confirmed to Sky News that the 3.68% five-year deal cannot currently be beaten.

Rates have been creeping down for months on expectations the Bank of England is now on a base rate cutting cycle - more on that in our previous post.

The movement back below 4% was a significant milestone after more than two years of pain.

Now they seem to be heading towards 3.5%, which is widely regarded as the likely landing point for interest rates in the next year or two.

Santander's reductions today are up to 0.29 percentage points.

The headline, lowest rate is for 60% LTV, a residential purchase mortgage with a £999 purchase fee. This is down from 3.8%.

The bank is also now below 4% on one two-year deal at 3.99% - though again it's 60% LTV.

11:14:08

BoE economist seems to take differing view of rate cuts to governor

ByJames Sillars, business reporter

A reminder, if it were needed, that the governor of the Bank of England does not set interest rates by himself.

Another member of the Monetary Policy Committee has weighed in on the prospects for a cut in November.

Huw Pill, the Bank's chief economist, has reiterated his concerns about cutting rates too quickly.

The speech was seen as tempering remarks by Mr Bailey in a newspaper interview yesterday that the bank could take a more "aggressive" stance on reducing borrowing costs.

AfterThe Guardian published the governor's comments, 98% of investor bets were for a cut to Bank rate at the next policy meeting on 7 November.

The pound lost more than one-and-a-half cents against both the dollar and euro, too.

Fast forward 24 hours and LSEG data showed a recovery for sterling of almost half a cent against both currencies late on Friday morning after Mr Pill's intervention, with the rate cut prospect now put at 90%.

Money blog: Cheapest long-haul holiday destinations revealed (2024)
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