Boost for family finances as Easter getaway begins

HM Treasury

March 1
11:17 2016

Families planning an Easter break will get a boost today when the cost of their foreign holidays are slashed as children under 16 will join under 12s in being exempt from paying Air Passenger Duty (APD) in economy class.

This change, which was announced by Chancellor George Osborne in the Autumn Statement 2014 and comes into effect from 1 March, would offer a saving of 142 to a family with two children under 16 travelling to long-haul destinations such as Florida, and 26 off a holiday in Europe.

The change will also act as a boost to international tourism worth more than 26 billion a year to the UK economy. In-bound passengers will also see the benefit and with people from Australia and the USA being some of the UKs most popular visitors, it is hoped the potential savings will prove an incentive for even more families from far-flung countries to visit the UK.

Exchequer Secretary to the Treasury, Damian Hinds said:

This government is pleased to make travel easier and more affordable for working families. Aviation plays a key role in our economy and in the midst of a volatile economic outlook it is crucial we help families where we can. As passengers flying to the UK from abroad will also see the benefit of this exemption I hope it proves an incentive to families abroad to enjoy this countrys own world-leading tourism industry.

Now that the exemption is in force children will receive a reduction in the duty of up to 71 per child.

Todays change follows a series of actions by this government to cut the cost of flying. On 1 May 2015, government introduced an exemption for children under 12 and since 2010, APD has only risen with inflation, representing an effective price freeze on short-haul rates since 2012.

Child exemption on economy flights:

Exemption savings 1 child family 2 child family 3 child family
Short-haul flights (e.g. Cyprus) Saves 13 Saves 26 Saves 39
Long-haul flights (e.g. Florida) Saves 71 Saves 142 Saves 213

According to the latest ONS Travel Trends statistics, the USA is the third most visited country for UK residents. With average spend per day by Brits continuing to be the highest for trips to North America at 82, the APD saving for long-haul flights will effectively pay for almost two days of a two child familys holiday.

The top 5 countries visited by UK residents have remained consistent since 2010. Spain continues to top the list in 2014 at 12.2 million visits, a 5.4% increase from 2013. Residents of the USA were the third most popular visitors to the UK, increasing by 7.1% to 3 million.

Top 10 countries visited by UK residents for at least one night:

Top ten countries

According to data collected by the Civil Aviation Authority, total passenger numbers grew for the fifth consecutive year in 2015. The UK ranks fifth in the World Economic Forums Travel and Tourism Competitiveness Report 2015.

Average spend per day on all visits abroad continued to rise slowly in 2014 and now stands at 58, up 1 from the 57 per day average in 2013 (ONS Travel Trends 2014).

Recent reforms to the rates of APD include:

  • Budget 2015 froze band A rates for a fifth year running
  • Autumn Statement 2014 exempted children on economy flights
  • Budget 2014 cut rates on the longest-haul flights
  • In 2015-16, the vast majority of passengers are seeing a freeze or cut in APD

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