The average gap year now costs more than £4,000, so be prepared with Fairinvestment.co.uk's money saving tips

02 September 2008 / by Rebecca Sargent
Whilst many students will be preparing for university this week, others will be planning their gap year. As a result, Fairinvestment.co.uk offers tips on saving and doing a gap year on a budget

Following recent news that 50 per cent of gap year travellers fear debt upon their return to the UK*, Fair Investment is offering tips on keeping tabs on your cash flow whilst having the time of your life.

Despite the 97.2 per cent A Level pass rate, not all former students will be heading straight to university. Many will choose to take a year out while they decide what to do in the future; in fact, NatWest estimated that 93,813 students took a gap year in 2006, that's 24 per cent of the student population.

However, as gap year students become more adventurous and keen to travel further afield, to Australia, the Middle East and South America to name but a few, the cost is also creeping up.

Recent research* shows that the average gap year now costs just over £4,000, whereas the majority of students only intend to spend between £1,000 and £3,000, which could suggest why gap year travellers are finding themselves worried about debt before they have even left for university.

However, there are ways to cut costs and make your money go further, avoiding debt both whilst on your travels and before you go away. Tips include:

• Shopping around for products like travel insurance – Comparison sites like Fairinvestment.co.uk could save you money

• Sticking to a strict budget – Not only will this help you get used to a student budget but being extra vigilant could stretch your cash much further

• Use a prepaid credit card – With a prepaid credit card you can only spend what is on it, making them ideal for gap year travellers on a budget. Mum and Dad could even load it up for you if times do get really tight

• If you get really stuck while away, why not offer to work in exchange for cash or your food and bed? Make sure you have the relevant working visa though, like in Australia

• Claim a tax refund – If you have been working during the holidays whilst at college you may be entitled to a tax refund – find out more from HM Revenue and Customs

• Choose a high rate savings account to save in before you go away – You will be surprised what a difference the interest can make

• Try to stay out of your student overdraft as much as possible while away, but if you get desperate it is better to dip into this, interest free, than to use a credit card with a hefty interest rate

• Before you go, get together anything you no longer want or need and have a car boot sale or make use of websites like ebay – You will be surprised what people will pay for your unwanted items

Fairinvestment.co.uk spokesperson, Rachael Stiles, comments: "Money can be a real worry when planning a gap year, as flights, accommodation and living costs soon add up. Try and save as much as you possibly can before you go away, preferably in a high interest savings account. However, if you are short of your target it is possible to survive on very little and still have fun!

"If anything, food, drink and accommodation is generally cheaper in gap travel destinations so your money will go further with a bit of strict budgeting. Prepaid credit cards are worth considering; you can either keep one loaded as a last resort or keep your entire budget on it without the worry of spending more than you have available.

"The last thing you want to be worrying about on your gap year is money so it really is important to save before you go! Research every possible money saving/making avenue – get friends together and have a car boot sale, clean cars, you could even do the ironing for cash!" Miss Stiles concluded.

*Research from Bebo