I often start these articles by giving you my location and today is no different. I am in Hook, Hampshire, looking out at a clear blue sky and about 6 inches of snow. It is glorious and surprisingly warm behind the glass, but outside the temperature would test the hardiest brass monkey!

The sun has provoked a discussion in the office about holidays, which resulted in a 50/50 split between those who will not be taking one this year because of the economic environment, and those for whom a holiday is the very last thing they would sacrifice. The latter crowd of course are doing the world and British economies a favour, because the deciding factor in whether this recession turns into a depression will be the level of economic activity we generate. So bluntly, if you are wondering whether to go on holiday or not, listen up; your country needs you to go!

The Cypriot economy is very dependent on British tourists and retired ex-pats. Setting the recession aside for a moment, a major factor affecting both groups is the weakness of sterling against the euro. A 35 percent fall in value hits hard, recession or not, so the trick for tourist destinations like Cyprus is to deliver real value for the holidaymaker. An example of this can be seen in the increased number of all- inclusive holidays available this year; giving visitors a more accurate idea of the cost of their holiday before they commit themselves. The responsibility for the tourist is to ensure that whilst they do not stop spending altogether, they take care to avoid wasteful expenditure.

In my opinion all those in employment with available disposable income need to bear this in mind. The economic wheels must keep turning and we are the ones with the oil, but at the same time we have an obligation to be prudent. With holidays and travel in mind here are a few pointers.

Currency

•  If you are travelling to the UK from Cyprus I would risk buying sterling now, but if you are going to a euro or dollar zone then I would wait. I may well be wrong, but most dramatic movements in the market usually result in a correction, and I suspect the pendulum will swing back before the summer.

•  If you are using a sterling credit or bank debit card abroad make sure you use one that does not add a foreign currency transaction charge.

Travel Insurance

•  If you are planning more than one holiday (lucky you) then an annual travel policy maybe more cost effective.

•  If you are in the Services make sure your policy covers you for cancellation arising from exigencies of HM Forces. For example our travel insurance will pay up to £3,000 if a trip is cancelled due to service commitments, subject to the reason for cancellation not being known at the time the trip was booked, or the policy taken out. The same cover also applies to family members on the policy, who may have been coming to visit you in Cyprus and had to cancel because you were suddenly deployed (www.forcesfinancial.com).

•  Remember if you are based in Cyprus , and intend travelling overseas to the UK or elsewhere, travel insurance is still recommended. You will need a policy that recognises journeys that commence outside the UK .

•  Don't count on standard travel insurance if you are planning to undertake extreme or dangerous sports. I know our customers love to challenge themselves, which is why we have underwriters who specialise in this type of cover, so check your insurer does too.

•  The EHIC replaces the now obsolete E111 form, and entitles all UK residents to free or reduced-cost medical treatment in European Economic Area countries and Switzerland . Each country's healthcare system is slightly different, so your EHIC might not cover everything that would be free on the NHS. By taking out travel insurance and carrying a European Health Insurance Card (EHIC) you can avoid substantial doctors' bills, delays in treatment and undue stress in the event of a medical emergency. Applying for the EHIC is free, and it is eligible for up to five years, for more information visit www.ehic.org.uk/Internet/home.do

Duty Free

•  With exchange rates as they are be sure your purchases are still a good deal – they may be cheaper at home

•  Whilst Raki might be the traditional Cypriot drink to enjoy on holiday, do you really need a bottle at home? (a snifter of the untouched exotic concoctions in my drinks cupboard would certainly put hairs on your chest!)

So in summary don't stop spending, just be careful to avoid wasteful expenditure by shopping around. Until next time I am off to buy some sun cream - it really is hotting up here - and I won't be buying the cheapest but I will be sure to find one that offers the best value and level of protection.

Al Voice

MD Forces Financial