Although record numbers of backpackers will head off on their travels in the next three months, more than two thirds will return home early because they have run out of money, according to research carried out by global foreign exchange specialist Travelex.

Travelex interviewed 500 backpackers returning home and discovered that ‘gap years’ are now ending on average three months early. The most common cause of their premature return to UK shores were their financial difficulties, named by 83 per cent of those questioned as the main reason for coming home. The study also revealed that basic financial mistakes are costing backpackers almost £800 which, if avoided, could extend their travels by several months.

Karen Dennehy, 24, London says, “I’d planned to travel for a whole year but had to return just after eight months, I was heartbroken but had no alternative as I’d run out of money. I made all the classic financial mistakes, gave no thought to how I was spending my money, wasn’t always 100 percent sure what currency I needed for where I was going and wasted a large chunk of my travelling budget. I’m kicking myself now as I’m back in Britain at work when I should be lying on a beach like I’d originally planned!”

Backpacking expert and founder of gapyear.com, Tom Griffiths comments: “Backpacking is more popular than ever and this year we will see a record number of Brits head off travelling. Sadly many of them will see their trip cut short because they mismanage their money. It’s all too easy to get ripped off or waste significant amounts of your travelling budget when exchanging foreign currencies. Fortunately there are a few simple steps that can ensure you and your money go much further.”

Travelex’s research shows that travellers will use thirteen different currencies on an average trip, exchanging money more than 25 times, making more than 42 withdrawals and 27 card payments; yet few travellers are aware of the pitfalls with each of these transactions. Travelex has highlighted the 7 deadly sins committed by travellers and reveals each financial impact:

Deadly Sin #1: Failure to shop around for currency. Don’t accept the first deal offered. Rates of exchange differ considerably and some providers carry hidden charges such as delivery and ambiguous ‘handling fees’. For example, the difference between the best (travelex.co.uk) and worst deal (Thomas Cook) on a £250 exchange on Thai Baht, equates to a potential loss of £27.44 before even stepping foot outside the front door. (*see comparison chart at end of release).

Deadly Sin #2: Paying with plastic. Travelex’s research reveals backpackers pay with plastic a whopping 27 times during their 9 month trip, clocking up an estimated £92.81 in commission charges. Their advice is to limit use, only paying for expensive goods (i.e. travel, scuba diving lessons) with cards and using cash day-to-day.

Deadly Sin #3: Not knowing the value of your currency. Having a good local knowledge and understanding of the value of the currency of the country you are heading to will save you from getting ripped off. Research by Travelex suggests that during the first 48 hours in a foreign country more than two thirds (64 per cent) of travellers miscalculated the currency and overspent by £37, totalling £370 on average.

Deadly Sin #4: Exchanging currency in hotels. Typically hotels abroad will not only provide the worst rates of exchange but will also charge high commission fees. Almost two thirds (63 per cent) of backpackers interviewed admitted buying currency at hotels, costing them on average £85.58 each during their trip.

Deadly Sin #5: Restricted currency countries. Many travellers fall foul of restricted currencies - meaning there are limitations to the amount that can be imported/exported (e.g. Vietnamese Dong and Loa Kip) – and research shows that money left over and exchange rate charges coming in and out costs travellers around £39. Travelex recommends speaking to a foreign exchange specialist before you leave.

Deadly Sin #6: ATM withdrawals. Charges vary but on average work out at around £3 per withdrawal. The average backpacker will withdraw cash more than once a week, spending an unbelievable £126.67 in charges during a 9 month trip. This figure can easily be cut by withdrawing more money, less often.

Deadly Sin #7: Exchanging too much currency. The average traveller returns with £48 worth of currency – either loose change or restricted currency - that cannot be exchanged into Sterling. Careful budgeting will reduce the amount of excess change. Alternatively foreign exchange companies offer a buyback product, which allows the customer to change left over currency at the end of their trip at the rate they bought it when they left.

John Nicholas, Director of UK Retail, Travelex says: “Our research clearly shows that backpackers are wasting large amounts of money due to poor money management. A basic understanding of your money abroad is essential for anyone embarking on extended travel and it’s clear that by following a few simple steps you can ensure that your year off travelling doesn’t end up being more like nine months.”

In 2007 over 300,000 individuals are expected to take a backpacking trip around the world, a massive 22.7% increase on last year’s figures. The following are the most popular countries and currencies used by backpackers: America (dollar), Costa Rica (Colon), Peru (Nuevo Soles), Bolivia (Boliviano), Brazil (Real), Argentina (Peso), Chile (Chilean Peso), Australia (Dollars), China (Yuan), Vietnam (Dong), Laos (Lao Kip), Cambodia (Riel), Thailand (Baht), New Zealand (Dollar).

Pre-paid cards provide a flexible and secure means of carrying and managing money abroad. One, such as the Travelex Cash Passport, can be loaded with foreign currency in advance with competitive UK rates of exchange and then used abroad at ATM machines and point of sale like a debit card. As the card is loaded before travelling customers can budget effectively and the same set of funds can be accessed by more than one card, meaning that relatives can top up the account in case of an emergency.

For the best price foreign currency in the UK guaranteed visit www.travelex.co.uk

- Ends -

Notes to editors:

Case study available for interview or comment.

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About Travelex:

Travelex is the world's largest foreign exchange specialist with over 700 retail branches and 16,000 business customers. There are retail branches at key airport, seaport and rail locations, in addition to tourist and business centres around the world. Over 40% of travellers and 1.5 billion passengers pass through airports at which the business operates including the major gateways at London, New York, Hong Kong, Frankfurt and Sydney.

Travelex is also the world's largest non-bank provider of international payment services, providing integrated payment solutions for businesses. The group is also one of the world's leading providers of outsourced travel money to banks, travel agencies and other financial institutions and one of the world's oldest issuers of Travellers Cheques.

Amount of Thai Bhat received for £250 on 30th April 2007