Helen White and her partner Paul Hart are planning a gap year. But the Brighton couple, aged 45 and 46, are not heading off after finishing school. They are part of what travel and finance professionals are calling a trend toward “golden gap years” or “micro-retirements” among workers in their 40s, 50s and 60s.
Paul, who works at an engineering company, plans to retire in four years. Helen, a business analyst, can request a sabbatical of up to one year from her employer. They have decided that Paul’s 50th birthday is the right moment to take an extended trip to Japan.
“We don’t just want to keep going on two-week holidays,” Paul said. “We want to really immerse ourselves in a place.”
A growing trend
Nearly a third of workers are actively considering taking extended time off from their jobs, with travel cited as the biggest motivator for half of those surveyed, according to a poll of 2,000 UK residents by travel firm Explore Worldwide.
Michael Edwards of Explore Worldwide said that with the state pension age rising, more people are looking to take their big trips earlier rather than waiting for retirement, taking chunks of time out from work instead.
Rebecca Williams of wealth manager Rathbones said she is speaking to more clients in this life stage who have financial freedom to make major changes. “We’re all living longer, healthier lives, and being in your 50s or 60s doesn’t mean winding down any more,” she said.
The trip that started it all
Helen and Paul’s idea took shape when they visited Japan for the Rugby World Cup in 2019, spending several weeks touring the country and watching eight games. The trip cost about 20,000 pounds, including match tickets, and was funded by money freed up after the couple paid off their mortgage.
“Once we were there, we realised there was so much more to see,” Paul said.
They plan to return this autumn for at least six months, staying through winter for Japan’s ski season and into spring for the cherry blossoms. Their estimated budget for the trip is 30,000 pounds. Paul said Japan does not have to be expensive if travellers avoid tourist hotspots, noting that food and transport costs are reasonable.
Planning the finances
Susan Hope of Scottish Widows said anyone considering a golden gap year should have a clear understanding of total trip costs, covering travel insurance, transport, event tickets, accommodation, and food and drink. She also recommended looking for ways to save early, including cancelling unused subscriptions and directing bonuses into a dedicated travel fund.
Williams said the key question is whether a person can afford a year away and still retire when and how they want to. Options for funding the trip include cash savings, drawing tax-free cash from a pension, or money released from downsizing a home. Self-employed workers might choose to continue some work while travelling to maintain an income.
Paul has been maximising his pension and ISA contributions for five years and plans to use his ISA to fund the trip, leaving his pension untouched. Anyone can save up to 20,000 pounds a year into an ISA, where growth is free of tax. He also noted that those over 55 can draw from a private or workplace pension, a threshold rising to 57 from 2028.
Helen has set up a savings pot in her banking app specifically for Japan and puts 100 pounds a month into it. “I’ve had that set up for a couple of years, so it’s already looking healthy,” she said.
Practical steps before you leave
Williams advised starting with the basics: decide where you want to go, how long for, and who with, before working out costs. She said options range from roaming Europe in a campervan to a round-the-world first-class itinerary.
Homeowners should be aware that most home insurance policies limit full cover to 30 to 60 consecutive days. After that, cover for theft, water leaks, or accidental damage may be restricted or absent. Unoccupied home insurance can cover a property for up to 12 months, though premiums average 25 percent higher than standard home insurance, according to price comparison firm Confused.com.
Car owners can file a statutory off-road notification, known as a Sorn, with the DVLA, pausing road tax and insurance payments and triggering a refund on any remaining months of vehicle tax already paid.
Helen and Paul plan to use the house-sitting website Trusted Housesitters to find someone to look after their home and cats while they are away.
Planning for the return
Williams cautioned that planning for the return is as important as planning the trip itself. A long break will typically mean a pause in pension contributions and a drawdown on savings. Workers should speak to their employer about sabbatical or unpaid leave options to secure a job to return to.
Those who will need to find new work on their return should prepare an up-to-date CV and maintain a cash buffer. Financial experts recommend holding about six months of outgoings as an emergency fund.
Helen and Paul have also used the National Insurance app to check their state pension entitlements. Paul needs one more year of contributions to qualify for the full state pension; Helen needs four.
Helen’s advice to others considering a golden gap year was to start saving early, set a clear goal, and research costs thoroughly. “Don’t be fooled by social media,” she said. “You’ll need to do your own research and get off the beaten track to find a bargain.”
