Try Argentina – to give your child the cheapest gap year
ARMED with good A-Level results, many young people will now be heading off to university – yet your child may have decided to take a break from the academic grind and let off steam on a gap year abroad.
Of those school-leavers opting to take time out, some will want to party their way around the world. Others will want to volunteer, learn a language or gain valuable work experience.
If your child is keen to pack a rucksack for the adventure of a lifetime, the key is to give them plenty of pre- planning advice. Follow our eight-point guide.
1 Build a gap year fund
AS a parent, it is worth starting to plan early and having an investment fund built up for when your child needs it – whether to pay for university costs, towards a mortgage deposit or to help fund a gap year.
Patrick Connolly, of financial adviser Chase de Vere, says: ‘The earlier you start, the easier it will be to provide a son or daughter with a tidy gap-year fund. If you are saving over a short period, say five years or less, stick with cash savings, searching for competitive rates. If grandparents are keen to help, involve them as early as possible.’
If you are not able to plan ahead, but still want to help your child fund their gap year – including flights, accommodation and volunteering project fees – you will have to meet any costs out of your disposable income, or from savings and investments. Connolly warns: ‘As a parent, you must be careful as you do not want to jeopardise your own long-term financial goals.’
2 Get your child to consider low-cost destinations
A GOOD way to keep down gapyear costs is by helping your son or daughter pick a destination where the pound will stretch furthest – and where living costs are low.
Currency expert FairFX says Argentina is currently the best value destination for gap year students. This is because the pound has strengthened against the peso in the past 12 months. The result is that purchasers are now getting an additional £276 worth of pesos for every £500 exchanged.
Brazil takes second place, providing an extra £112 worth of Brazilian real for every £500 exchanged. The pound has also improved against the currencies of Russia, South Africa, Sweden and Australia.
Ian Strafford Taylor, of FairFX, says: ‘Following the pound to destinations where it is doing well against the local currency could save your child hundreds of pounds. But those taking a gap year also need to consider living costs in the countries they are keen on.’
3 Encourage your offspring to spend wisely
IF YOU are worried that your son or daughter could be reckless with cash on their gap year, find time to sit down with them and encourage them to keep a lid on spending. Andrew Hagger, financial expert at money website Money Comms, says: ‘Help your child draw up a detailed budget before they set off. Encourage them to divide their money into weekly amounts and spend no more.’
Help your son or daughter register for online banking so they can keep tabs on their bank balance from anywhere in the world. You could also point out that taking on a part-time job while overseas is an option for replenishing funds.
4 Help your child to manage their money
ONE way that you can really aid your child is by going through the best options for buying and carrying their spending money abroad – to avoid them being stung by poor exchange rates or hefty card fees.
One option you could suggest is a
prepaid card that can be loaded before travel and then used overseas to withdraw cash in a range of currencies. Georgie Frost, of comparison website GoCompare, says: ‘With a prepaid card, you can top up with money as required. Some cards carry an annual fee, typically around £ 10 to £ 15 a year. Some charge additional fees for cash withdrawals. But a big advantage is your child cannot go overdrawn as they can only spend money loaded on to the card.’
FairFX has a Family and Friends card where you can top up your own card back home and transfer money to your child’s card in an emergency. Other prepaid card recommendations include Revolut and WeSwap.
Also remind your son or daughter that if they plan on taking foreign currency in cash, they should never buy it at the airport. Exchange rates are better if currency is ordered online. Compare rates at MoneySavingExpert’s TravelMoneymax online tool.
5 Look at adding them to your credit card
SOME credit card providers allow you to add extra cardholders to an account. Frost says: ‘With Barclaycard, for example, your child must be over 18 and officially registered as living at the cardholder’s address. You will still be responsible for all the spending on the card. That said, you can create weekly alerts so you can keep an eye on spending.’
Cards can result in costly overseas fees. Creation Financial Services, Halifax and Santander charge no fee on some credit cards when used overseas. Starling Bank’s mobile- only bank account debit card and Nationwide’s FlexPlus debit card allow free cash withdrawals worldwide.
6 Ensure your child finds the right insurance
ALMOST half of young people set off on their travels without the right travel insurance. Simon Wil- liams, of website Compare cover, says: ‘ By not having adequate cover, thousands of young backpackers could be putting themselves at risk should they fall ill or have an accident.’
As a parent, you cannot extend a family travel insurance policy to cover a child on their gap year.
This is because a family multitrip policy will have maximum trip length limits not long enough for gap year travel. Frost says: ‘Your son or daughter needs to look for backpacker cover as this will give them continuous protection for an extended time abroad – usually from 31 days to two years. ‘As well as ensuring the level of medical expenses cover and compensation for lost and stolen luggage is adequate – respective minimums of £5 million and £2,000 – your child also needs to check their policy covers all the countries they plan to visit and all the activities they want to take part in.’
Make sure your child arranges insurance long before a trip starts as this means cancellation cover is in place.
If travel incorporates Europe, make sure they sign up for a free European Health Insurance Card (EHIC) which provides them with access to free or cut-price state medical care. Apply at ehic.org.uk.
7 Help them to keep in touch cheaply
YOUR child will be keen to stay in touch with you and friends when travelling. You will want them to avoid running up costly phone bills.
Before travelling, urge your son or daughter to check their mobile phone operator’s roaming policy. This is important outside Europe.
Get them to ask about any phone packages or deals for overseas use, but also suggest they check if it makes sense to buy a SIM card when overseas to install in their handset. This means they will be charged at local rates.
8 Help them back up paperwork
SET aside time to sit down with your son or daughter to help them back up all their paperwork – such as passport and insurance details – before they head off.
A good option is to store copies in a secure email account. You should also keep copies yourself.
Before travelling, make sure they have checked any visa requirements and the latest travel advice at Gov.uk/foreign-travel-advice.