Himalayan peaks, the Amazon rainforest, white sandy beaches. Do you sometimes
daydream of escape from the office? Probably, according to research for
Norwich Union, the insurer, which indicates that a quarter of British
workers are planning a career break in the next year.
But a worthwhile career break is more than a long holiday. It takes months of
planning – much of it financial – and does not come cheap. “Money is the
biggest single concern,” says Rachel Morgan-Trimmer, founder of
thecareerbreaksite. com. She says that the average one-year break costs
£11,000 to £15,000, on top of loss of income, and can take more than six
months to organise.
The financial priority for most career breakers is to come back to employment.
If you are happy with your job, a sabbatical – an extended period of leave,
usually unpaid – could be the answer. About one in five firms has a
sabbatical policy, but more are open to negotiation.
If you are dissatisfied with your work and plan to resign, you should consider
how your plans for time away could help to secure your next role. Jenny
Ungless, a career coach, says that career breakers must “up their game” to
impress future employers as exotic travel becomes more mainstream.
A number of organisations, including www.i-to-i.com, offer supported
placements on volunteer projects, such as Panda conservation in China. These
can teach skills, and sometimes languages, that most employers rate highly.
Paid work is an alternative for those not taking a sabbatical from work. A
TEFL course costs from about £150 to £400 and will enable you to teach
English abroad. Placements in East Asia offer payment of more than £1,000 a
month, plus free flights and accommodation.
Economising at home in the run-up to your break is one way to boost your
savings. Comparison websites, such as moneysupermarket.com and uSwitch.com
can help you to cut mortgage, insurance and energy bills by hundreds of
pounds. But funding your trip is just the start. Planning for when you are
away is the next step. Rather than run the risk of being penalised for
missing payments, you should arrange to pay credit card, and any other
relevant bills, by direct debit. You may also want to redirect mail to a
friend’s address in case of urgent correspondence. Royal Mail will do this
for £35.95 a year. A key consideration will be what to do with your home
when you are away. Letting it out will help to keep it secure and should
cover mortgage repayments. But before inviting your new tenants to move in,
you must notify your lender and can expect to pay a one-off administrative
fee of between £50 and £100. You must also tell your insurer, otherwise your
home cover may be rendered invalid.
To shave more from the cost of your home loan, you could switch from a
capital-repayment loan to an interest-only deal. A homeowner with a £185,000
mortgage at 5 per cent with 20 years to run could cut
the monthly bills by £450 by switching to an interest-only deal. But don’t
forget to move back to a capital-repayment loan on your return.
Your employer, or private pension provider, will advise you on pension
options, which may include boosting your fund with a lump sum before your
break. Martin Bamford, of Informed Choice, the independent financial adviser
(IFA), says that employees on sabbatical are likely to lose death-in-service
benefit for the period of their time out and should consider buying life
insurance. If you have income protection cover, ask your insurer how this
will be affected.
While the internet reaches all but the most remote villages, tracking the
fortunes of the FTSE 100 may not be your idea of a break. For that reason Mr
Bamford says that you should consider leaving investments in the hands of a
discretionary manager who will keep an eye on them for you. Alternatively,
Anna Bowes, of AWD Chase de Vere, another IFA, suggests putting your money
in a fund of funds, where risk is spread widely – so a blip in one sector
should not unduly affect your investment. She says that strong performers
include Miton Optimal’s Special Situations fund and Jupiter’s Merlin range
of funds.
Remember that your break will affect tax planning. As you are out of the
country, you may be eligible for refunds on income, council and road tax and
to tax-free interest on savings. Information is online at the websites of
the Revenue (hmrc.gov.uk), your council (see Direct.gov.uk) and the DVLA
(dvla.gov.uk). If you fill in a self-assessment return each year, you can
register to complete it online.
Selecting the right travel insurance is key. Make sure that it covers all
activities you will try. Compare deals at comparison sites.
Most important of all, however, is to make sure that you have a cushion of
savings to absorb unexpected expenses and to fund any period of unemployment
on your return. “The last thing you want on your break is to be worrying
about your bank balance back home,” Ms Morgan-Trimmer says.
CASE STUDY
Alex Mason, a civil servant in the Department for Environment, Food and Rural
Affairs (Defra), took his career break in a “natural hiatus” between a
secondment to Brussels and his return to Whitehall.
The 32-year-old, from South London, spent a year in Madagascar, from December
2005, leading a marine conservation expedition for Blue Ventures, which
surveys coral reefs off the island’s south west coast and develops
strategies for their protection. He also taught English in the village
school and enjoyed working alongside the locals.
Mr Mason, pictured while on his travels, took special unpaid leave from work
and says that his bosses were “very supportive”. At the time of his trip, he
did not own a property in the UK and was spared any mortgage worries. As an
expedition leader, his flights, insurance and expenses were paid for by Blue
Ventures.
His experiences have given him a new understanding of sustainable development;
a field that is of great interest to Defra. “If you can, go for it, the
experience is life-changing,” he says.
Secure a sabbatical
Your company may have a sabbatical policy offering structured support to
employees taking time out. This is more common in big-name companies than
small businesses.
If your employer does not have a sabbatical policy, you may still be able to
take one – albeit under a different designation, such as “unpaid special
leave”.
If you are nervous about approaching your boss, Rachel Morgan-Trimmer, founder
of thecareerbreaksite.com, suggests bringing up career breaks in a
roundabout way to gauge a response.
When you come to apply for time out, Jenny Ungless, a career coach, says that
you should make a sound business case for the trip, explaining how your
plans will benefit the company.
For example, if your employer operates in Latin America, it could be
beneficial if you learnt Spanish on your break or stopped off on your
travels to meet your overseas colleagues.
