Holidaymakers are typically changing lower amounts into foreign currency to spend abroad in 2023 than last year, according to internal data from a bank.

In signs of people having reduced budgets as living costs bite, the average amount being exchanged to take overseas so far this year is £308.

Tesco Bank, which released the figures, said this is lower than the average amount of £336 in 2022.

However, the typical amount this year is still higher than the average of £298 in 2019.

The increase since 2019 indicates that, while customers are still grappling with tighter budgets due to the cost of living, they are factoring in potentially higher costs when abroad, the bank said.

Tesco Bank also commissioned a survey by Opinium Research among more than 2,000 people across the UK in June who take holidays abroad.

Nearly a fifth (18%) said they will exchange all their spending money ahead of their holiday, while 13% plan to only take their debit or credit card.

One in 10 (10%) exchange their holiday money once they have arrived at their holiday destination by using an overseas ATM, while 6% said they they do this at the airport they are flying from.

Shopping around for exchange rates before getting to the airport however could help someone potentially find a more favourable deal.

Holidaymakers should also factor in potential additional charges when using overseas ATMs.

One in six (15%) people never pause to check the exchange rates before they buy their currency, the survey indicated.

Iain Donachie, head of money services at Tesco Bank, said: “While many will be travelling abroad this year, it’s clear the cost of living is having an impact on people’s spending habits and how they budget for summer breaks and getaways.

“It would seem many prefer having their spending pots in front of them, with a fifth opting for cash in hand. With the costs of visiting many popular holiday destinations increasing, people may prefer the certainty of seeing how much money they have left.”