Maybe you can put it down as another post-Covid trend, such as working from home, but it’s clear something is going on. People working for a range of employers are increasingly hoping to take sabbaticals or extended time off, with many keen to improve their work-life balance by exploring the world for several weeks, several months or a year or more.
Surveys and articles have talked about the rise of the “middle-aged gap year”: AKA the “midlife gap year“; the “grey gap year”; and the “golden gap year”. The trend is fuelled by workers aged 50-plus who are often “empty nesters”, have paid off the mortgage and are keen to get off the hamster wheel for a bit, in spite of the cost.
Late last month, the Guardian revealed that workers have been increasingly choosing employers who offer sabbaticals over those that don’t. Adecco, one of the world’s largest HR companies, has identified sabbaticals as the no1 workplace trend right now.
If you are one of the lucky ones being offered one – or you are considering taking some leave, or even giving up your job, in order to take a big trip – here is what you need to consider to make it happen.
Check your insurance
If you are only heading off for a month, there is not a great deal to worry about as this is in effect an extended holiday, and most standard home and annual travel insurance policies will cover you.
However, as soon as you exceed 31 days, it all gets more complicated. Most standard home insurance policies allow buyers 31 days away without problem. If you are going away for six months and your unoccupied home is trashed by burglars or there is a fire, it is highly likely that your existing insurer will not pay out on the grounds that you left it empty.
If your existing insurer will not extend its cover, a host of specialist insurers will sell you unoccupied home insurance. A site such as MoneySupermarket will help find you the cheapest deals. The exact price will depend on your home’s value. A typical 1980s house with a £360,000 rebuild cost can be covered for about £200 a year (building only).
Travel/medical insurance
Again, most standard annual travel policies will only cover you for individual trips lasting up to 31 days. However, plenty of insurers now offer specialist gap-year insurance that will cover any destination around the world, or just Europe, for up to 12 months or even longer. Your age will only become an issue if you are over 65. Existing medical problems will be a much bigger factor.
This is one area where it really pays to read the small print and make sure you are getting the cover you need. If you are going to be trekking in the Andes, will the policy cover you over a certain altitude? Are your bikes covered against theft? Planning to scuba dive? Make sure it’s included. If you are heading to North America, do you have enough medical cover to pay for emergency treatment that could bankrupt you if you don’t?
Comparison sites can help, but spend some time on this purchase. A couple heading off around the world for a year can expect to pay about £1,500 for good-quality cover, assuming they are in good health. One travel insurer that Guardian Money has heard good things about is Big Cat. It probably won’t be the cheapest, but it gets great reviews.
The company also allows you to buy cover if you have already started your travels and are outside the UK. Standard travel policies typically don’t allow this.
If you already have decent annual cover through your current account provider – such as Nationwide’s FlexPlus worldwide travel insurance for trips of up to 31 days – consider paying for an upgrade to cover longer trips.
And, as with all policies, don’t forget to include existing medical conditions. If you have significant conditions, check out the insurance quote before you do anything else, as this may have a significant bearing on whether your chosen trip is even possible.
As a general rule, a year-long annual policy will be cheaper than buying bits of cover as you go. Avoiding travel to the US or Canada will definitely keep your insurance costs down. One thing that often catches out the unwary is hiring a scooter in Vietnam or similar. Will you be covered if you fall off and are badly hurt, and you don’t have a UK licence to ride that bike?
What’s it all going to cost?
The million-dollar question. It all depends on where you are going and how you like to travel. A couple cycling around Europe, camping most of the time and living on supermarket food could probably get away with as little as £30 a day – or even less.
Spend every night in cheap hotels (or Airbnbs), with the odd meal out, and you will be looking at £70-£140 a day for two, depending on which European countries you plan to visit. You could probably spend a week in Albania for the same cost as two days in Switzerland.
A couple backpacking in south-east Asia, where hotels and food are much cheaper, can have a good but not extravagant time for £40-£50 a day. Cheap hotels in Thailand can be found for £25, and street noodle soups for £1 to £2. Head to Japan and the costs are probably 50% higher.
Are you happy to share a bathroom? If not, it will add to the cost.
Head to North America and it’s a different story. Car hire is still cheap, but the cost of food and hotels has gone through the roof in recent years. Expect to spend £160-£200 or more a day per couple for basic living in the US.
Flights, ferries and other big-ticket items will all cost extra.
Longer-term rentals – of, say, three months – will cut accommodation costs hugely.
Renting out your home
Increasingly, middle-aged gap-yearers are funding their trip by renting out their home. The financial benefits of this are obvious, but it is not for the faint of heart.
It is much easier if you have paid off your mortgage. If you haven’t, you will have to tell your provider, which may increase your mortgage payments and could even insist you switch to a new deal entirely.
Many people will be able to use a site such as Airbnb to rent out their home for as long as they want, though some parts of the country have specific regulations. Airbnb automatically limits “entire home” listings in Greater London to 90 nights a year, unless you have planning permission to host more frequently.
Lastly, don’t forget to tell your home insurer.
If it’s a longer trip and you are using an agent to find a tenant, the company will usually take significant fees – typically between 7% and 14% of the monthly rent. You may want landlord insurance, too.
Next, you have to consider what you will do with all your stuff. Many tenants want unfurnished or near-unfurnished properties. If you don’t have a friend with an empty barn or garage, what will it cost to store your stuff? Unless you live a minimalist life, storage costs can really add up.
And don’t forget that rental income is taxable.
If all that has put you off, consider another option: renting out part of your property – for example, a double room to a couple. Technically you will still occupy the home, but they will have the run of it while you are away. The rent they pay will be less, but you get to leave your stuff in situ – a huge advantage if your sabbatical is relatively short.
The rent a room scheme allows you to earn up to £7,500 a year tax-free from letting out furnished accommodation in your home.
House swaps
Academics taking lengthy sabbaticals have been swapping houses for years – so why not you? These really work if you want to travel to one place and can find someone who wants to go the other way. However, plenty of gap-yearers visiting multiple places have also successfully swapped homes with people in those locations. This is easiest if you live in a desirable destination such as London or another big city, but not impossible elsewhere.
It helps if you have a friend nearby who can manage the house between arrivals. The financial savings of swapping are huge, and it can be the difference between affording the extended break or not.
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SabbaticalHomes.com, HomeExchange and the Guardian’s own Guardian Home Exchange are all worth checking out.
‘Travel money’
The next thing to consider is how you are going to access your money while you are away, as cash machine charges and other money transfer costs can really add up if you get it wrong.
A bank account – even if it is a paid-for one – that allows free ATM withdrawals and zero-charge card purchases worldwide is a great place to start. Guardian Money favours Nationwide’s FlexPlus packaged account costing £13 a month, which does exactly that and comes with worldwide travel insurance (up to 31 days) and other insurances. Some other accounts will offer free ATM withdrawals in Europe only.
A Halifax Clarity credit card offers zero-cost purchases and a cheapish way to take out cash worldwide, and is highly recommended.
The alternative is to use one of the money transfer firms such as Wise. For a one-time fee of £7, the fintech firm will supply a Wise card that allows users to spend money in most countries’ local currency and get limited free access to cash at local ATMs.
If you are travelling to South America, Western Union transfers are often the best option.
As a general rule, the advice for travellers is to have several payment options in their wallet, ideally with different banks/payment providers. And make sure credit card bills are set up to automatically debit from a bank account.
It is also advisable to have an emergency $200 or €200 in cash each if you are venturing into far-flung spots.
Cancel subscriptions
Clearly you won’t be attending the gym while you are away so the membership will need to be cancelled or frozen, often a month in advance.
This really is a good time to trawl all those direct debits and cancel anything you won’t need.
If you are going away for a year, you may want to sell your car. If not, cancel the insurance and “Sorn” it (often called a “statutory off road notification”): tell the DVLA you are taking your vehicle off the road, provided you can keep it in a garage, on a drive or on private land.
An incredible year: the couple who found adventure in two panniers
Claire and Adam Crew-Gee, who live in Bristol, have just returned from a gap-year adventure that started in Japan and south-east Asia and ended a few days ago after they cycled and train-ed it from Istanbul across Europe and back to the UK.
Adam, 61, who works in IT sales, was granted a year of unpaid leave, while Claire, 57, resigned as a speech and language therapist after her employer was unable to offer her a sabbatical.
To fund the trip, they rented out their large Bristol flat for the whole year, putting their belongings into their own self-contained garage.
Their youngest son, who had just started college in the city, was deposited in student digs, and their ginger cat, Fern, was sent on her own gap year nearby with friends.
“We’d done a bit of bike touring and had loved it, so we decided to travel mostly by bike. In the end we bought some Airnimal bikes that tour well but can be folded up and put on a train or bus when needed. It was the making of the trip,” says Claire.
The couple estimate they spent about £40 a day in south-east Asia, rising to £60 in Japan. In eastern Europe the sums spent were similar, but their bills rose to £100- plus a day in France and Italy.
Overall, they estimate their rental income covered most of their day-to-day living costs and some of their other expenses including some flights. They didn’t camp and mostly had their own bathroom.
“For the last year we’ve lived out of two panniers carrying barely anything. We have visited 17 countries. Highlights include the Shimanami Kaido [a cycling route] in Japan, a stunning island hop, and South Korea’s “Four Rivers Ride” with the kindest, most joyful riders alongside us. We have cycled the rice bowls of Malaysia, breezed through Angkor Wat’s temples in Cambodia, dipped into the great rides of New Zealand, and navigated the traffic in Ho Chi Minh City, Vietnam,” says Claire.
“Taiwan won the best all-round great country award. It’s been an incredible year of freedom and adventure – and we feel so lucky to have done it,” she adds.
Pensions, Nics and more: the financial implications of a sabbatical
If you are an employee, one of the key things to think about is the financial implications of heading off for perhaps a few months.
Of course, a lot will depend on whether this is paid or unpaid leave. If in any doubt, talk to your manager or HR department about what impact (if any) your trip will have on your terms of employment and work-related benefits. For example, even if your leave is paid, some things that are dependent on length of service, such as annual leave or contractual redundancy payments, may be “suspended” during the period you are away.
Clearly the financial impact will be bigger if you are taking unpaid leave. “A pause in your earnings also means a gap in pension contributions, and also a loss of national insurance (NI) contributions, which may reduce your state pension entitlement,” says the financial adviser website Unbiased.
However, you may be able to carry on paying into your workplace pension while you are away – and it may be that your employer will do so, too.
A lot depends on the type of pension scheme: if it’s a “defined contribution” (AKA money purchase) one, it can be easier to be flexible with employee and employer contributions than with a “defined benefit” (or final salary) one, says Charles Cotton at the Chartered Institute of Personnel and Development.
“It also depends on the organisation’s sabbatical policy. If the employer fully or partially funds the sabbatical, usually that will include its pension contributions. If the workplace does not pay towards the sabbatical, then the employer may still decide to make pension contributions,” he adds.
There are ways to minimise the impact of any missing pension contributions. You could save up the contributions you will miss while you are away and pay them in either before you go or when you get back, though this can cause tax implications, says Cotton. Alternatively, you and your employer can work out what the loss has been to your pension pot and come up with a plan to get you back on track – for example, you pay in an additional 1% for the next 18 months.
If you aren’t receiving an income from your employer while you are away, you won’t be contributing towards your NI record for benefit or state pension purposes. So you may want to talk to your employer and/or the Department for Work and Pensions about that. Check if you are able to make voluntary NI contributions to fill any gaps, says the online bank Chase.
