Paying for a holiday is often one of the biggest financial commitments of the year.

There are a number of schemes available to ensure that your money is safe and that you will be repatriated should your travel company go out of business.

Financial protection in travel can be confusing, so here we give you an easy-to-follow run down of when your money should automatically be protected and what you can do when it isn’t. We also have a checklist for what paperwork you need when booking your holiday.

Remember that the easiest way to ensure you get the protection you want is to ask your travel company if, and how, your travel arrangements are protected.

ABTA travel companies will be able to advise what to do if you don’t have automatic protection.

When your money will be automatically protected

  • Packages: packages offer the best form of protection. Not only are you entitled to a refund or repatriation should your travel company go out of business, but you also benefit from additional legal protection should there be a problem with your holiday.
  • Flight-Plus: this is where you book a flight, and accommodation and/or car hire to be used with it, from one company but they haven’t packaged it together. These arrangements are financially protected, however, you do not get the same legal protection as a package should there be a problem with your holiday.
  • Charter flights.

More Information

What to do if your arrangements aren’t protected

Don’t rely on travel insurance: very few travel insurance policies cover company failures. They cover belongings, delays/cancellations and medical assistance but don’t usually refund you or get you home if your holiday company fails.

Do ask your travel agent for help: your ABTA travel agent can help you with supplier failure insurance for products and services that are not automatically protected.

Do check your credit card T&Cs: under the terms of the Consumer Credit Act, credit cards (but not debit or charge cards) offer you some protection if your holiday company goes out of business.

You should be able to get your money back (this applies to payments between £100 and under £30,000 under the Act) however credit card issuers will not help you get home if you are abroad when the company goes out of business.

Although there is no legal requirement for debit cards to cover you, you may be able to claim from your bank under Visa’s voluntary policy. You need to check with your bank for more information.

PROTECTION SCHEMES: ABTA

The ATOL scheme of financial protection (see below) covers flight-based holidays. If you buy a land or sea-based package holiday (such as coach, rail or cruise) from an ABTA Member your monies will be protected by the ABTA scheme of financial protection. This means that if your travel company fails and your holiday can no longer go ahead you will be entitled to a refund if you are yet to travel and hotel costs and transport home if you are abroad.

In addition to financial protection, ABTA Members are also bound to comply with the ABTA Code of Conduct, which ensures high service standards and fair terms of trading.

Booking with an ABTA Member also gives you recourse should you have a problem or complaint with your travel company.

PROTECTION SCHEMES: ATOL

ATOL stands for Air Travel Organisers’ Licence. It is a government-run financial protection scheme operated by the Civil Aviation Authority (CAA).

What you pay for your package holiday that involves flights and holidays including a flight plus accommodation and/or car hire, must be protected under an ATOL licence.

You will receive an ATOL Certificate from your travel company at the time you make your payment, and you will need to keep the certificate safe.

ATOL cover means that if your travel company fails and your holiday can no longer go ahead you will be entitled to a refund if you are yet to travel, and hotel costs and flights home if you are abroad.

Please note: flights booked directly with airlines are not protected under the ATOL scheme.

ATOL is a financial protection scheme, it does not provide other assistance if there are other problems with your holiday.

When your money may not be protected:

Scheduled flights booked directly with airlines: you have no protection for your money if the airline fails financially.

Accommodation-only bookings: these are not legally required to be protected. However some travel providers, including many ABTA Members, choose to protect these through ABTA. Check with your travel company what protection is in place.

Holidays sold by airlines: some airlines offer protection but some do not, if you are going to book your holiday directly with an airline, check with them before you book.