Sorting out your Financial Responsibilities

Whilst this may not be the most exciting element in planning your trip it is vital as it will give you peace of mind whilst you’re away and on your return, and help to ensure your you career break is the experience of a lifetime.

Very few career-breakers will be responsibility free and everyone’s circumstances will differ, and the length of your career break will dictate how many changes you may need to effect. We’ve outlined below some of the key issues that you may need to consider and take specialist advice on:

Bank Accounts

It may be worth giving a trusted friend or family member control of your account via Third Party Mandate from your bank or building society whilst you’re away. It is certainly worth setting up telephone banking before you go, remember that you will need the appropriate overseas telephone numbers and to be wary of carrying all your passwords etc. with you. Online banking is very useful but please remember that Internet cafés do carry a security risk so be cautious.

Loans

Ensure you have enough funds in your bank account to cover any payments whilst your away and either set up direct debits if you haven’t already or ask a trustworthy friend to post regular cheque payments. You could ask to freeze payments for a while but this is unlikely to be successful.

Bills

If you’re keeping your home think ahead and make any advance payments that you can, alternatively ensure your direct debits are set up or ask a trustworthy friend to help with posting payments.

Credit Card Bills

These are relatively easy to manage whilst you’re away, either ask a friends to make the payments for you, set up a direct debit or make a payment online (ensuring you’re happy with the security). Make sure to let your Credit Card Company know you travelling overseas so they don’t assume your card has been stolen and cancel it.

Standing Orders and Direct Debits

Re-asses them, cancel those that are not needed and ensure that all payments will be met.

Maintenance Payments

Notify the CSA of your intentions to ensure no arrears build up in your absence and contact them on your return.

Subscriptions

If you’re going for more than a few weeks, remember to cancel newspaper and magazines etc.

Annual rail and bus tickets

Don’t forget to contact your supplier to see if you’re able to obtain a partial refund.

Pension

The type of scheme you have will dictate how much you need to resolve, it’s worth checking directly with your own pension scheme arrangers. Generally company schemes will be more complex and can be tied up with other employee benefits and you will need to discuss and negotiate your arrangement if you are returning to your job. Personal schemes can be easier as most will allow you to reduce or freeze your contributions for a time.

Company-share save schemes

Talk to your employer, it is likely that you will have to opt out during your time away.

Investments

It may be worth talking to a financial advisor regarding your portfolio and considering moving some of your assets into more secure investments whilst you’re away. Don’t forget to ensure you have some savings available for your return.

Insurance Policies and Income Protection

Make sure you check Life and Private Health policies for exclusions before you go, as some policies will not cover travel in certain countries. It is unlikely that you will be able to suspend payments on these.

Will

This may not be the most enjoyable or pleasant thing to think about but it is something that all adults should do, if they haven’t done already, regardless of whether they are taking a career break or not.

Tax and National Insurance

If you’re leaving your job don’t forget to keep your P45 safe for your return. If you need to file a tax return whilst your away work out how you’re going to this (don’t forget you can now do this online) and if possible post it before you go.

Career-breaks under a year are unlikely to affect your tax code however if you’re unsure talk to the Inland Revenue or a tax expert. Don’t forget that if you choose to rent your home out whilst taking your career break it is classed as taxable income, letting agents will generally deduct income tax for you prior to sending payment to you.

National Insurance is very important too, if you miss payments you may lose entitlement to maternity benefits, unemployment benefit and state pension. If you are likely to have missed payments for 10% of your working life it is worth contacting the National Insurance Centre (Tel. 0845 9154811) to discuss making voluntary class 3 contributions.