Workers reveal retirement gap year ambition
Two out of five (40%) workers plan to take a retirement gap year when they’re 60-plus, using the money they have built up over their lifetimes.
The biggest motivation for a gap year – cited by 25% of those questioned – is the chance for a once-in-a-lifetime experience while 12% see it a chance for a career break and 11% are motivated by a desire to see the world. They plan to spend around £5,000 on their trip.
While gap years are usually taken by students after school or university, research by Charter Savings Bank found just one in five (18%) are planning a year out by the time they are 30-years old.
The bank found that around half (49%) of over-45s have never taken a gap year or extended break from work but they intend to do so once in their 60s or when they retire.
At the top of the visit wish list by both under 25s and over 55s is continental Europe, a greater proportion of older travellers would like to visit Australia and New Zealand.
The table below shows the preferred gap year destinations:
Funding the gap year
Would-be gap year travellers will rely on savings to fund their trips, the study showed. Up to two-thirds (63%) said they will take money from their savings accounts for the trip compared with just 7% who will use credit cards.
Younger travellers are slightly less likely to cash in savings – 56% of under-25s will take out cash while 16% will rely on credit cards and one in three (32%) will work during their gap year to raise cash. Only around 9% of over-55s will be working on their gap year.
Paul Whitlock, director of savings, Charter Savings Bank, said: “Many of us think about gap years being the preserve of backpacking students, but increasingly we’re seeing that older customers are catching the travelling bug.
“Once-in-a-lifetime opportunities can happen at any time of life, and while globe-trotting in your 60s might seem like a long time to wait it does have the advantage of travelling in a little more luxury and not having to run up debts to fund it.
“It definitely highlights that a savings habit does pay off, even if the amount you’re able to put aside today seems too small to make a difference.”
Financial considerations for a retirement gap year
Charter Savings Bank outlines the financial considerations for those planning a gap year in retirement:
- Set a budget before setting off and if necessary, see a financial adviser to assess your financial position
- Make a plan on what to do with your property – renting out your home while you are away will help provide funds but you will need someone to manage the property and will need to review insurance
- Take out long-term trip travel insurance
- Move your finances online so you can manage money when you are travelling.