Mortgages
Set up a flexible mortgage, offered by lenders such as Intelligent Finance (www.if.com), well in advance. This will allow you to take payment holidays and make overpayments. Plan to let your property while you are away. Family and friends are a good choice. If you do let your property, you will be able to offset mortgage interest against your rental income for tax purposes.
Home insurance
If a property is left unoccupied for more than a month, most insurers will waive cover but you can take out specialist buy-to-let policies if you plan to let your home during your year out. It should be straightforward to arrange building cover while you are away but expect to pay a higher price in home contents cover if you leave the house furnished. If you are renting the property out the premium will go up because landlord’s contents insurance is more expensive — they know tenants generally take less care.
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Bank and credit cards
The Nationwide Visa card and the Lombard Direct credit card are the only deals in the market which do not levy any foreign exchange loading fees, which are typically 2.75 per cent, and are levied on card transactions abroad. Travellers should ideally use a credit card for purchases and a debit card for cash withdrawals (all credit cards, Nationwide included, charge customers a withdrawal fee for making a hole-in-the-wall transaction).
Details: www.nationwide.co.uk; www.lombarddirect.com.
Tax
If you have been employed and have not yet used up all of your personal tax allowance when you travel, you can claim when you return on the unused balance of your personal allowance. Otherwise you will be put on a higher-rate tax code when you return. When you start work with a new employer, ask the tax office to issue a new coding notice. This will mean you have a full tax allowance and won’t have too much tax deducted.
National insurance
Those travelling away for a year should consider Class 3 voluntary national insurance contributions to maintain the full state pension. You can do this by writing to the Revenue’s Pension Service and setting up a £7.35 weekly direct debit which will maintain your state pension record.
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Travel insurance
Annual insurance cover which allows a continuous journey of more than the usual 30 consecutive days is essential. Older people in particular need to pay extra attention to the small print to make sure that there is no existing medical condition which will make their cover invalid. Older people considering risky pursuits should consider specialist cover from providers such as Harrison Beaumont (www.hbinsurance.co.uk).
Employment rights
If you arrange a year’s sabbatical with your employer, negotiate hard: ideally, you want the time to be treated as continuous service so you maintain holiday entitlement and unfair dismissal rights.
Private-sector employers will often only offer you first refusal on a job when you get back. Public-sector employers are more likely to offer a job when you return.
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Pensions
Tom McPhail, a pensions research manager at Hargreaves Lansdown (www.hargreaveslansdown.co.uk), says: “Make sure everything is parcelled up safely before you go away. If you are in a final salary scheme you can feel secure that someone is looking after your cash.”