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Travel insurance customers can save on their holidays by planning ahead and choosing the right destination.

Even as consumers feel their purse strings tightening amid the uncertainty in the international financial markets, all is not lost when it comes to choosing a destination for the summer holidays.

Alistair Rennie, a spokesperson for Post Office Travel Money, used the example of Portugal to explain further. He pointed out that prices in the country had fallen by 30 per cent, in comparison to prices a year before. Eating a meal in the Algarve would now cost travellers almost half of what it would have been a year back, he added.

In fact, the price of a single item will vary widely across the whole of the eurozone, which meant that choosing a destination with lower costs could help tourists to save significant amounts of money from everyday expenditure.

Mr Rennie said: "Just the costs across different countries in the same unified monetary area, there can be such variation."

According to recent statistics made public by the Post Office Travel Money, Portugal, Spain and Bulgaria provide travellers with the most value for their money this year.

Portugal costs £68.80, Bulgaria £72.32 while Spain would cost travellers £78.28, it has been claimed by the report's Beach Barometer.

Although, these destinations are great buys for families, Post Office Travel Money has advised parents to be careful when spending money on items such as lilos and jelly shoes or on pedalo rides.

Portugal's Algarve has topped the list as the cheapest holiday destination this year and costs approximately half the price of the most expensive holiday spot, which is Sorrento in Italy.

Recently, the airline Monarch announced an 11 per cent rise in business this summer compared to the same period last year. To date, it would the busiest season for the jetliner which is scheduled to charter 300,000 passengers to their holiday destinations this year.