Pack the gap year survival kit - Financial Mail Women's Forum

View the original article on the Financial Mail Women's Forum

By Jo Thornhill

Don’t set off on your trip of a lifetime without proper travel cover and easy access to cash en route … All the advice you and your kids need for a successful Gap Year.

Taking a gap year remains a popular option for school-leavers despite higher university fees from September this year. But gone are the days of touring South-East Asian beaches for months on end. The new generation of ‘gappers’ take shorter, more focused trips, motivated by the desire to gain valuable skills and work experience in the hope they will be more employable on their return.

More than one million young people aged between 16 and 24 are expected to go on a gap-style trip between now and August. But they must plan carefully to ensure they have the right insurance. It is also important to be able to access cash wherever you are in the world.

INSURANCE

A QUARTER of gap year travellers do not have travel cover, according to specialist backpacker and gap year insurer mindthegapyear.com. This is despite statistics showing they are more likely to suffer an illness or accident and have belongings stolen than those on shorter holidays.

Standard travel insurance policies are not sufficient for gap year travel, particularly as they will usually have a limit on the length of the trip and may not cover activities such as white water rafting or bungee jumping.

Mike Powell, analyst at financial data provider Defaqto, says anyone planning a gap year really should shop around among specialist insurers. ‘Check that you will be covered for all the activities you want to do, if that involves extreme sports or skiing for example, and if you are planning to work – either voluntarily or for a wage,’ he says.

Ensuring you have sufficient medical and emergency cover is also vital as hospital bills in countries such as Australia and America will be high.

If gap travellers know they will need to return home at some point – perhaps for a family wedding or a graduation – they will need to factor that into their policy. About half of all gap year policies allow this, but you must check. Simply returning to Britain on standard gap year cover could make the insurance invalid.

Cover is available from several providers, including Endsleigh, Boots, Mind The Gap Year, worldnomads.com, statravel.co.uk and Columbus Direct. But it is not cheap – you should expect to pay about £80 for six months of cover and between £150 and £300 for 12 months. For example, a comprehensive 12-month Young Traveller Economy worldwide policy would cost £234 with Citybond Suretravel. InsureandGo’s Backpacker Bronze package would be £255.

Lydia Dickenson, 18, from Sutton, Surrey, has taken out a gap year travel policy with Endsleigh, which specialises in insurance for young people.

Lydia, who has won a place at Jesus College, Oxford, in September to study history, will this week set off for Germany on a six-month voluntary work placement as a teaching assistant in a school for disabled children in Heidelberg.

Endsleigh offers policies for working and non-working gap years and its standard cover includes a wide range of sports and activities, including one bungee jump, horse riding and water skiing. Its Adventure policies cover more dangerous activities and extra bungee jumps. Lydia, who has been working part time in a hairdressing salon since last summer to save money for her trip, has paid £150 for her travel insurance.

She was most concerned about getting cover for her possessions. ‘I’m taking my laptop, mobile phone and music player away with me so it was important to know they would be covered for loss, theft or damage,’ says Lydia, who will live with two other volunteers in a rented flat during her stay in Germany.

Endsleigh imposes a £75 excess on claims. This is the first part of any claim you would have to pay, but cover for personal belongings is generous at up to £350 an item. Cash is covered up to £500.

Lydia, who lives with her mother, Caroline, 49, and her sister, Emily, 24, will be covered for any emergency medical care in Germany under the European Health Insurance Card, known as Ehic.

All EU countries are signed up to the scheme. But the travel policy covers personal liability, compensation for specific types of accidents and a cash benefit if you have to stay in hospital, adding an extra layer of protection on top of the Ehic.

‘I wouldn’t want to risk not taking insurance,’ says Lydia. ‘It does seem like a big expense at a time when I’m trying to save, but it gives peace of mind.’

MONEY MANAGEMENT

TRAVELLERS on extended breaks and gap years are advised not to carry large sums of cash for obvious reasons. But that means using debit and credit cards, which carry their own risks – and high charges for use abroad.

Typical fees for using a bank debit card to make a purchase or withdraw currency abroad range from about 1.6 per cent to more than 3.75 per cent, according to Defaqto.

That can mean an extra £1.75 just for getting the equivalent of £50 out of a cash machine.

Some current accounts offer debit cards that have no charges for use abroad, including the Santander Zero account, but you must have a minimum income or another product with the bank, such as a mortgage or investments. Both Metro Bank and Norwich & Peterborough Building Society’s Gold Light account offer debit cards that are free to use abroad.

Credit cards can be useful in an emergency, but charges for use abroad apply and interest rates on outstanding balances can be high, particularly on cash withdrawals, which are not recommended.

The Halifax Clarity card, Post Office credit card and Metro Bank credit card are all free to use abroad, although it may be difficult for young people to be accepted for these products. Metro’s card is available only if you have its current account.

It may be preferable for a parent to take out a card, giving a supplementary card to their child to use for emergencies during their gap break. In this case those with the Santander Zero card or Saga Platinum card would also enjoy no charges for overseas use and could give a second card linked to their own account to their child.

It is prudent to take a mix of cash, debit and credit cards, and perhaps a prepay card, which can be loaded with currency in advance.

Prepay cards can be used like a bank debit card to spend in shops, restaurants or to withdraw currency from a cash machine. But the main benefit is that a thief cannot spend more than is on the card.

There are fees for using these cards so read the small print first. The Fair FX, Post Office, Travelex and Caxton FX cards are among the best. Caxton was recently named the best prepay card in the Moneyfacts Consumer Awards.

Milly Jenkin, 23, took a year out after school to work and travel in Africa and then a second gap year when she was 21 to do a ski season in Val d’Isere in the French Alps. Her advice to travellers is always to have cash options, particularly in remote areas.

‘During my travels it wasn’t always easy to get to a bank and changing traveller’s cheques would have been impossible,’ says Milly, who now works in media relations and lives with friends in Clapham, south London. ‘I used my bank debit card mostly, but always tried to carry a bit of extra cash just in case.

‘I was in a group in Africa, travelling overland in a truck from Kenya to Cape Town, and people were willing to help each other out and lend cash if someone else was short until we reached the next cash machine.’

Emily all set for African adventure
WHO pays for a gap year can be a contentious issue, particularly in the current climate when the bank of Mum and Dad has been stretched.

Research by card provider American Express found that while 58 per cent of young people going on a gap year intend to fund it themselves, one-third will still be getting some help from parents. About one in ten will have their whole trip paid for.

Emily Lloyd, 18, from Harpenden, Hertfordshire, says she is unusual among her peers in her decision to take a gap year.

Emily, who has deferred a place to study medicine at Nottingham University, says almost all her friends have begun their degree courses as they are keen to beat the rise in tuition fees that start in September.

‘Debt is a big worry for most students, including me,’ says Emily. ‘But I’ve always wanted to take some time out to travel and gain new experiences.

‘I’ll be coming back to start a long medical degree course. But hopefully after the gap year I’ll feel refreshed and ready to study again.’

Emily, who leaves for Zambia in a fortnight, will spend five weeks working in a school in the village of Mwandi in the south-west of the country, teaching English and Maths to children and helping to build a new block.

After this she will travel for five months with a friend in India and then China before flying to New Zealand, where she hopes to ski.

But saving up for this trip has not been easy. Emily has been working in two jobs since she left school last summer – at a gymnastics club for youngsters and as a nanny to two children.

Emily now has £10,000 – more than enough to fund her trip without help from parents.

‘With one eye on the student debts that lie ahead, I was determined I wouldn’t be getting into any debt to fund my gap year,’ she says.

‘I have budgeted for all the activities I plan to do. It has been hard work but I’m sure it is going to be worth it.’

Cutting cost of staying in touch
The cost of using your mobile phone increases significantly when you leave Britain.

Any deals including text messages, minutes and data download usually become void and receiving calls and texts could be more expensive.

Mike Wilson, manager of mobile phones at comparison website moneysupermarket.com, says: ‘Although a lot is being done by the European Commission to bring down costs for using mobiles in Europe, there is no such action in process when travelling further afield. It is vital consumers are up to speed with the charges they might face.’

Wilson recommends gap year travellers get a global SIM card. These offer reduced rates in various countries. Check that the areas you want to go to are covered.

To avoid running up huge bills you can opt to switch off certain facilities, such as voice-mail, dataroaming and automatic updates.

Thursday, 9th February 2012

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