Money tips for gap year travellers

Thousands of students will take a gap year before starting university, but plenty of forward planning is vital if you don’t want to run out of cash half way through your trip.

With ongoing economic uncertainty taking its toll on family finances, it has never been more important for adventurous youngsters planning gap years to make every penny count.

Figures show that the average cost of a gap year overseas is between £3,000 and £4,000, so the first obstacle to overcome is how you will find this amount of money.

Funding your gap year

The first thing you need to consider when working out how to pay for a gap year is exactly how much your trip will cost you in total. A good way to do this is to sit down and add up the cost of your travel and accommodation, as well as how much you are likely to spend on food and activities while you are away.

Remember to make room for some extra emergency funds – just in case. If these costs are more than you anticipated, then you may need to change your plans or find a well-paid job and live as frugally as possible in the interim.

It's probably better to stay at home to work and save for six months and then have six months abroad than to travel for a year without enough money to fully enjoy yourself. If you are planning to spend your time working for a good cause through a charitable gap year scheme, however, you may be able to cover a lot of your costs via fundraising.

Potential sponsors include local businesses or organisations and (for smaller donations) family and friends. Putting on fundraising events such as cake sales can also help to boost your gap year savings balance.

However you choose to raise the money, though, make the most of what you have by opening a high-interest savings account. The best type of account for this, unless you have already used up your annual individual savings account (ISA) allowance, is a tax-free cash ISA.

Current best buys include West Bromwich Building Society’s WeBSave ISA 2, which is currently paying 2.92%.

However, the rate on this account includes a 1.16 percentage point bonus lasting until July 31 next year, while you will also need at least £1,000 to qualify.

If you are planning to save for more than 12 months, or you do not have £1,000, a better option is thereforeNorthern Rock’s e-ISA Issue 2 at 2.80% (bonus-free), which can be opened with just £1.

For those who have already used their ISA allowances, meanwhile, the best easy access savings account on the market – Coventry Building Society’s Poppy Online Saver – can also be opened with £1 and pays 3.15% (before tax), including a 12-month, 1.15 point introductory bonus.


Gap year spending

Taking the time to think about how you will access your cash while you are away is also vital as getting it right can save you a packet. Shopping around to find the best price for the foreign currency you plan to take with you is very important.

Don’t take too much cash with you, though, as this leaves you vulnerable to thieves – not to mention exceeding your insurance policy cash limit.

Credit cards are also to be avoided, although most cards are unavailable to school leavers and students anyway. This is because they charge commission and foreign loading fees – usually of between 2.75% and 3.00% - should you use them to withdraw cash. Any debts left mounting up on the cards will also accrue interest, which could mean a nasty shock when you get back to reality after your travels.

There is a form of plastic that makes a lot of sense for gap year travellers, though.

Pre-paid cards – which could be described as the modern day travellers cheques – are a more secure alternative to cash that also offer competitive exchange rates and the ability to monitor your spending quickly and easily online.

The Cashplus Gold Activeplus Euro or Dollar card and the FairFX Euro/Dollar Currency Card Specials are both good options.

With cashplus, you pay 99p per UK withdrawal and £3.00 elsewhere in the world, while with FairFX you pay €1.50 within Europe (on the Euro card) and $2.00 worldwide (with the Dollar card).

Bob Atkinson, travel expert at, said: "Planning really is the key when it comes to gap year finances and having the right products in your wallets can really save a packet, allowing you to make the most of all the adventures at your fingertips.”

Covering your gap year

Gap year insurance, or backpackers insurance, is aimed at people travelling to a number of different destinations worldwide over an extended period of time in the same trip.

You may not need this cover if you are only visiting one country, although most standard policies will restrict the length of your trip to say 30 days so it is crucial to check this before buying a policy.

If you are going overseas to do volunteer work then it is worth checking out the specialist policies for trips of this kind, while remembering that some countries are regarded as no-go areas by almost all companies.

Remember too that if you're doing anything particularly extreme during your gap year adventure – such as skiing, kayaking or sky-diving - you'll need to buy cover that includes adventurous activities.

Finally, if you're travelling within Europe, pick up a free European Health Insurance Card from the Post Office or at

These cards are necessary to receive free or reduced-cost medical care within the EU, but should not be seen as a substitute for travel insurance as they won't provide cover for lost baggage or cancellations.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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