Gap Years For Grown-Ups!

Gap years aren't just for 18 year-olds. Here are some top financial tips for older travellers.

Madonna may have reached the grand old age of 50 this weekend but it hasn't stopped the Queen of Pop embarking on a gruelling world tour.

But while Madonna might be in the minority in that the Sticky & Sweet tour will involve gyrating on stage at various venues across North America and Europe, other people of her generation are simply keen on travelling the world.

Those that do so for extended periods of time have been dubbed `grown up gappers'. However unlike younger gappers, older people have more financial responsibilities to take care of before they hop on a plane to sunnier climes.

Property and mortgages

Consider letting your property. The rental income could help fund your adventures overseas.

Exchange rates mean your money will stretch much further if you rent out in pounds and head to a country whose currency is pegged on the US dollar. Alternatively, the weakening euro is making Europe a more attractive destination than it's been lately.

But before you hand over the keys to new tenants make sure your paperwork is in order. You need to let your mortgage lender know what you're up to and some will insist that you change to a buy-to-let mortgage.  Read How To Rent Out Your Home for more information.

Unless you have family or friends on hand to help out you might also need to employ the services of a letting agent which could cost anything from 10% to 15% of your monthly rent. Whether you use a letting agent to find you a tenant or find one yourself, make sure you check them out thoroughly and get both a tenancy agreement and inventory signed.

If that sounds like a hassle, and you don't need the rental income, consider doing a house-swap instead. This could potentially save you thousands of pounds on accommodation while you're abroad. Read Go On Holiday For Free for more on this topic.

Pension

If you have a personal pension, you can carry on making contributions while you are away. Each year you can put into your pension the equivalent of your earnings that year, subject to a maximum of £225,000. This means someone on a gap year could put an amount into their pension up to what they have earned in that tax year.

If you've had no allowable earnings at all within the tax year you can still invest up to £3,600 (gross), or £2,808 (net) per annum, or have someone do it on your behalf. If you pay into an employer related scheme you should speak to your employer about your options before you make any decisions.

Travel insurance

If you are jetting off on a prolonged trip you will need a special gap year or backpacker travel insurance policy. Most standard annual policies stipulate that trips can only be for a maximum of 30 days, so aren't suitable for gap years.

As a result a number of insurers offer "gap insurance"; American Express, for example, covers people up to the age of 79, or 65 if they are travelling to North America or the Caribbean. Be aware though that travel insurance premiums shoot up once you reach the age of 65 as insurers deem older travellers more likely to make a claim. For more information about travel insurance for older people check out The Best Travel Insurance for Older Travellers.

Spending money

Nationwide wins hands down when it comes to the best debit card to use abroad. Most other banks charge foreign loading charges and transaction charges when you use an ATM or make a purchase on your debit card abroad.

But Nationwide's FlexAccount Visa Debit card doesn't levy any additional charges for using the card overseas so it's worth opening a FlexAccount just for your travels.

A credit card can also be a useful back up while you're travelling and can be handy for paying for large purchases such as flights or accommodation. Again, Nationwide is a good choice as it doesn't charge extra fees for foreign usage. The Post Office, Saga and Abbey are also good alternatives.  Read The Best Credit Card To Use Abroad to find out more.

Whichever credit card you take abroad with you, don't be tempted to use it in an ATM as you'll be charged a higher interest rate on the cash your withdraw and -- unlike normal transactions where you benefit from around 56 days interest free - you'll pay the higher rate from day one too.

Before you set off it's also a good idea to set up online banking so you keep track of both your current account and credit card while you're away simply by logging on at an internet cafe. As well as helping you manage your finances you'll also be able to spot any fraudulent card use quicker than if you waited until you got home and opened your statement.