What is financial protection – and why is it so important for your holiday?

21 July 2025

Booking a holiday and counting down the days until you can set that ‘out of office’ is one of life’s great joys. But in the midst of all the excitement, there’s one essential thing that’s often overlooked: financial protection.

What if something goes wrong? How protected are you? And how much do you really know about it?

Having peace of mind that your holiday investment is safe is vital. But the world of financial protection can feel like a bit of a minefield. That’s why we’ve put together this article to walk you through what financial protection really means, how it works, and why it’s such an important part of booking with confidence.

What is financial protection – and why is it so important for your holiday?

ATOL protection: what you need to know

ATOL (Air Travel Organiser’s Licence) is a UK financial protection scheme regulated by the Civil Aviation Authority (CAA) and it protects travellers if their travel company stops trading. In the UK, all travel companies selling package holidays with flights must hold an ATOL.

One of the most significant benefits of ATOL protection is the guarantee of refunds and repatriation. If your travel company stops trading while you’re on holiday, ATOL ensures you will be able to get home safely at no additional cost – meaning you won’t be stranded abroad. If your travel company ceases trading before you travel, you will get your money back.

When you book an ATOL-protected holiday, you’ll receive an ATOL certificate. This confirms what is protected, who is covered, and provides details on how to make a claim if needed.

Are ATOL and ABTA the same thing?

No, they’re not the same thing:

ATOL protects package holidays that include flights. It ensures your money is safe and guarantees your return home if your travel company goes out of business while you’re away.
ABTA (Association of British Travel Agents) is a voluntary trade association. It can provide financial protection for holidays that don’t include flights, such as rail, cruise or coach trips.

ABTA membership is voluntary and while ABTA can provide financial protection for non-flight holidays, it’s important to know that there are other recognised forms of financial protection for non-flight holidays that are equally robust, including independent trust accounts.

I paid for my holiday using my credit card. If the travel company ceases trading, can I claim through my credit card provider?

If you use a credit card to pay for your holiday, you may have extra protection under Section 75 of the Consumer Credit Act 1974. This means you may be able to make a claim through your credit card provider if something goes wrong, for example if the holiday you paid for isn’t provided because your travel company stops trading.

To make a claim, the total value of your booking must be between £100 and £30,000, though even partial payments (like deposits) may still be eligible as the claim applies to the overall cost of your trip.

If you’ve paid by debit card, you may still be able to claim through the chargeback scheme—a voluntary process provided by most banks and card issuers (like Visa and Mastercard). It allows you to dispute a transaction and potentially recover your money.

If your holiday is ATOL protected, it is advisable to claim through ATOL first. However, if that isn’t successful, you can potentially still seek compensation through section 75 or chargeback process as a backup.

Doesn’t my travel insurance cover me?

This is a common question—and the answer depends on your policy.

While many travel insurance policies cover things like cancellation, medical emergencies, or lost luggage, not all of them cover the failure of a travel company.

If you’ve booked different elements of your holiday separately (e.g. flights, accommodation, and car hire), check whether your insurance covers the full package. For example, some policies may cover airline failure but not accommodation booked separately.

Is my money safe with Travel Counsellors?

Yes - absolutely. Travel Counsellors holds an ATOL licence (ATOL number 6751). Any package holiday you book with us that includes a flight will be ATOL protected.

Alongside ATOL protection, Travel Counsellors has an independent trust account which offers financial protection for every element of your holiday, including non-flight holidays and standalone travel services. There are strict rules around when customer monies can be removed from this trust account, meaning you have comfort that your monies are protected.

More than just protection — we’re here for you

At Travel Counsellors, we go beyond financial protection. We have an unwavering commitment to customer care and providing outstanding travel experiences. Our community of trusted independent Travel Counsellors all share a passion for making every element of your experience completely personal to you. And with our 24/7 customer support, we are with you every step of the way.

Final thoughts

Financial protection may not be the most glamorous part of planning a holiday—but it’s one of the most important. Knowing that your money is secure and that support is on hand if something goes wrong allows you to book with peace of mind.

If you have any questions about financial protection, ATOL, or how we keep your holiday safe, don’t hesitate to get in touch with your Travel Counsellor.

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