Money & Budgeting

Gap Year Financial Planning UK — Guide for Parents and Students

Financial planning guide for gap years. How much to save, funding options, budgeting abroad, and managing money for a year out.

By PocketWise · · 5 min read

A gap year can be transformative, but it needs financial planning. Whether you’re a student saving up or a parent helping out, here’s how to make it work.

Gap Year Costs Overview

Typical Budgets by Type

Gap Year Type Total Budget Monthly Spend
Working holiday (Australia) £3,000-6,000 start Self-funding while there
Backpacking Asia £8,000-12,000 £600-1,000
Backpacking Europe £10,000-15,000 £800-1,200
South America £10,000-14,000 £700-1,000
Africa volunteering £5,000-10,000 Varies
Organised programme £3,000-8,000 Plus living costs
Working in UK £2,000-5,000 Depends on living situation

Cost Breakdown

Expense Category Budget % For 12 Month Trip
Flights 10-20% £1,000-2,500
Accommodation 25-35% £2,500-4,000
Food 20-25% £2,000-3,000
Transport 10-15% £1,000-1,800
Activities 10-15% £1,000-1,800
Insurance 5% £300-600
Buffer 10% £1,000-1,500

Saving for a Gap Year

How Much to Save Each Month

Target Amount Months to Save Monthly Savings
£6,000 12 £500
£6,000 18 £333
£10,000 12 £833
£10,000 24 £417
£15,000 18 £833
£15,000 24 £625

Where to Save

Account Type Benefits
Easy access savings Flexibility, instant access
Regular saver Higher rates, discipline
Cash ISA Tax-free (if staying beyond tax year)
Travel money card Pre-load for trip

Earning While Saving

Job Type Typical Earnings
Minimum wage PT (16 hrs/week) £600/month
Weekend hospitality £400-600/month
Summer full-time £1,500-2,000/month
Tutoring £15-30/hour
Freelance work Variable

Sources of Gap Year Funding

Student’s Own Funds

Source Potential
Part-time job savings £3,000-6,000
Summer job £2,000-4,000
Selling items £200-1,000
Birthday/Christmas money Variable

Family Contributions

Approach Details
Full funding Less common but happens
Matching savings Family matches what student saves
Specific costs e.g., flights only
Emergency fund Parent holds as backup

Working During Gap Year

Option How It Works
Working holiday visa Work legally (Australia, NZ, Canada)
Teaching English Paid work abroad
Seasonal work Ski resorts, summer camps
Remote work If you have skills

Organised Programmes

Many volunteer programmes include:

Included Not Included
Accommodation Flights
Meals Travel insurance
Project costs Spending money
In-country transport Visa fees

Cost: £1,500-6,000 for programme plus £2,000-4,000 flights and extras.

Budgeting for Destinations

Southeast Asia (Thailand, Vietnam, etc.)

Expense Daily Budget
Hostel £6-15
Food £8-15
Transport £3-10
Activities £10-20
Daily total £27-60

Budget for 6 months: £5,000-11,000

Australia (Working Holiday)

Initial Costs Amount
Flight £800-1,200
Visa £510
First month living £1,500-2,500
Travel insurance £300-500
Total to start £3,000-5,000

Then earn while travelling — average backpacker wage £15-25/hour.

Europe

Expense Daily Budget
Hostel £20-40
Food £15-30
Transport £10-20
Activities £15-30
Daily total £60-120

Western Europe is expensive — Eastern Europe cheaper.

South America

Expense Daily Budget
Hostel £8-20
Food £10-20
Transport £5-15
Activities £10-25
Daily total £33-80

Managing Money Abroad

Best Ways to Access Money

Method Pros Cons
Travel card (Revolut, Wise) Best exchange rates Need app/internet
Credit card (no FX fee) Purchase protection Interest if not cleared
Local cash Always works Theft risk, poor rates
Debit card Simple Often poor rates/fees
Card Purpose
Revolut/Wise Daily spending
Credit card (no FX fee) Backup, large purchases
Small cash amount Emergencies
UK account Bills continue at home

Avoiding Common Money Mistakes

Mistake How to Avoid
ATM fees Use fee-free cards
Dynamic currency conversion Always pay in local currency
Carrying too much cash Limit to few days’ spending
Not tracking spending Use budgeting app
Running out of money Buffer of 20%

Travel Insurance

What to Look For

Coverage Essential?
Medical expenses Yes — £2M+
Repatriation Yes
Belongings Yes
Trip cancellation Depends
Adventure activities If doing them
Working cover If working holiday

Typical Costs

Trip Length Budget Insurance Comprehensive
6 months £150-250 £300-450
12 months £250-400 £450-700
18 months £350-500 £550-900

Don’t skip insurance — medical bills abroad can be catastrophic.

For Parents: Supporting a Gap Year

Should You Contribute?

Consider Questions
Can you afford it? Without affecting your finances
Have they contributed? Effort and saving shown
Is it well-planned? Thought through, not whim
Will it benefit them? Genuine growth opportunity
Fair to siblings? Consistent approach

Ways to Help

Contribution Type Benefit
Match their savings Rewards their effort
Pay for flights Significant one-off cost
Emergency fund Peace of mind for both
Travel insurance Practical, essential
Communication costs Stay in touch

Setting Boundaries

Boundary Example
Total contribution “We’ll give up to £2,000”
Matching “£1 for every £2 you save”
Specific costs “We’ll cover insurance and flights”
No bailouts “Budget to come home before running out”

Staying in Touch

System Cost
WhatsApp/iMessage Free (with WiFi)
Local SIM card £10-30/month
Skype credit For emergencies
Regular check-ins Agreed frequency

Before Departure Checklist

Financial Preparation

Task When
Confirm total budget 6+ months before
Open travel accounts 3 months before
Order cards 2 months before
Notify bank of travel 2 weeks before
Change money 1 week before
Download banking apps Before leaving

Documents

Document Action
Passport Valid 6+ months beyond return
Visas Research and apply early
Travel insurance Buy before departure
Driving licence International permit if driving
Bank documents Emergency contact numbers

Financial Safety

Precaution Why
Multiple card sources If one fails
Note card numbers separately If stolen
Emergency contact numbers Banks, insurance
Some foreign currency For arrival
Copies of documents Digital and physical

Returning Home

Managing the Return

Expense Budget Needed
First month’s rent £500-1,000
Deposit Month’s rent often
Living costs Until employed
Job hunting period 1-3 months typical

Don’t spend everything — keep a return buffer.

Re-Entry Finances

Task When
Update address with bank On return
Check credit score Any issues
Review standing orders Anything to cancel
Tax implications P60 from any work
Job applications Ideally start before return

Summary: Gap Year Budget Creation

Step Action
1 Define trip type and destinations
2 Research realistic daily costs
3 Add flights, insurance, visas
4 Include 15-20% buffer
5 Create savings plan
6 Identify additional income sources
7 Set up appropriate bank accounts
8 Discuss family contributions
9 Book flights and insurance
10 Build in return buffer

A well-planned gap year is an investment in life experience — make sure the finances support rather than undermine the adventure.

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Sources

  1. MoneyHelper — Everyday money