An estimated eight million people use prepaid cards for their holiday spending money, but just 15% spend the full amount they topped up with, research reveals.

On average, travellers are returning from holiday with £55 left on these cards, though for frequent travellers, this figure rises to £96, according to Currensea.

In total, it means £438m languishes on these prepaid cards.

It said that as withdrawals can result in fees or poor foreign exchange rates, travellers could be stung if they don’t use the card properly.

As an example, prepaid card provider Caxton charges £1.50 plus a 2.49% exchange fee to convert amounts back into sterling. Further, it also charges a £2 month fee if the card is not used for 12 months.

The travel debit card provider said younger travellers are at greater risk of losing out as it’s poll of 2,001 holidaymakers revealed a fifth of 18-34-year-olds return from abroad with over £100 still on their prepaid cards. This figure compares to 14% of 35-54-year olds.

Currensea’s research also revealed that a third of prepaid currency card users mistakenly believe they offer a better foreign exchange rate on overseas transactions.

For a fifth of holidaymakers, they stick with cash on their overseas trips.

James Lynn, co-founder of Currensea, said: “UK travellers are sitting on a huge stockpile of unused spending money. Many will have worked and saved extremely hard to enjoy their first overseas holiday since the pandemic but risk wasting huge amounts in foreign exchange fees if they aren’t savvy with how they get their holiday money.

“Too many people still believe that prepaid cards offer the best solution when spending money abroad. They used to be seen as more secure – as if you lost your prepaid card, you only lost the amount you topped up – however, banks and other financial providers have caught up. If you lose your bank card abroad, you can usually simply freeze it, meaning that the biggest advantage prepaid cards may have had historically is no longer relevant.

“It’s a guessing game trying to figure out how much money you’ll need with many overestimating their spend. Whilst travellers can withdraw what is left on their prepaid cards once they return from holiday, many are likely to forget the high fees they’ll face mean that it’s not worth exchanging. Unfortunately, many of these cards simply get stuck in a drawer at home and travellers are losing huge sums.”

Related: See YourMoney.com’s Spending abroad: should you use a debit, credit or prepaid card? For more information.