Gap year spending (Part 2 of 2)

This is a continuation of a previous feature story, which can be found here.


The cost of living varies wildly around the globe. You can live like a king in some countries on £20 a day – in other destinations that will just buy you a couple of pints.

To give you an idea how far your money will stretch, take a look at the Post Office’s Barometer ( It gathers data from around the world on some of the most common holiday buys (food, drink, suncream, etc). Bali emerged as the cheapest long-haul destination in the 2015 report.

Alternatively, produces an annual Backpacker Index that adds up the cost of a typical day’s travel: a dorm bed in a hostel, three meals, two trips on public transport, one cultural attraction and three beers.

Nepal is cheapest at $16.08 (£10.38) a day, followed by Hanoi and Ho Chi Minh City, both in Vietnam, at $16.54 (£10.68) and $16.84 (£10.84) respectively.

Travel money expert FairFX says it makes sense to head to destinations where strong sterling and exchange rates mean you’ll get more for your pound. Brazil, for example, is cheaper than last year but many popular gap year options such as the US, UAE and China are more expensive now compared to last year.


When it comes to accommodation, most gap year students opt for budget hostels. The best equipped offer cheap dormitory beds, as well as single or double rooms, and often a travel agent service for trips and tours.
Hostels might sound a bit basic but this type of accommodation should set parents’ minds at rest – their child will be among like-minded travellers and they’re likely to make friends.

Unsurprisingly, the cheapest place to book accommodation is online. Sites such as,,, and are great for comparing budget accommodation.

“Our advice is to have at least your first night booked in any destination you go to on your trip, so you have something secured,” suggests Bob Atkinson, travel expert at “Secure rooms using a credit card paying in local currency only and pay in cash on arrival if you are managing your funds in that way.”


In an ideal world, parents would encourage their child to save up for a gap year but this is easier said than done.

“There’s a couple of options you can take to fund a child’s trip if you’re not able to pay the costs upfront,” says Kevin Mountford, head of banking at “Firstly, a personal loan may be a quick and simple option; this will ensure that you pay a fixed payment over a set period of time.”

And in recent months, personal loan rates have fallen to their lowest ever. At the time of writing, rates for sums of £5,000 and £7,500 stood at around 3.6%, according to

Credit cards are another option but make sure you pick one with 0% on purchases such as the Post Office Matched Credit Card, which is interest-free for 25 months. You’ll need to make sure you pay off the balance before the interest-free period is up to avoid being stung by interest charges.


Once abroad, your child will need to be able to access cash and pay for things by card. Most debit and credit cards come with a raft of charges for foreign use – but there are exceptions such as Halifax’s Clarity Credit Card or the debit card which comes with Norwich & Peterborough’s Gold Current Account (although you need to fund the account with £500 a month).

Pre-paid cards are a cost-effective alternative to debit and credit cards. Pre-loaded with cash, these cards work like a debit card except you can’t go overdrawn.

“Most pre-paid offerings can be set up online, which will allow parents to load the card straightaway, giving their child a set limit while they’re overseas. A replacement card can also be issued quickly should the card be lost or stolen,” says Mountford.

Double-check any fees before you choose a card – some providers charge you for ATM withdrawals and card transactions. Among those that are fee-free are My Travel Cash and Caxton FX.

It’s every parent’s nightmare to get a call or email from their child from abroad saying they have been robbed of their possessions and bank cards.

Daniel Webber, managing director of FXcompared, says: “If the recipient is on the move through the far corners of the world and doesn’t have a bank account handy, then Western Union and Moneygram’s on-the- ground outlets will be helpful. However, there may be high fees associated with these transfers.”


Having their possessions stolen is just one issue backpackers could come up against on their travels. They may fall ill or have an accident or need to curtail their trip for another reason – so travel insurance is vital.

Gappers need a special backpacker or gap year policy rather than an annual multi-trip policy, as these normally limit the length of a single trip to 31 days.

“There may be exclusions or restrictions on cover in some countries, so be sure to check that they will be covered for every country they are planning to visit, even if they’re just passing through,” advises Caroline Lloyd, travel insurance expert at “Likewise, if the Foreign Office has issued advice that tells British citizens to avoid travelling to a certain area, this may well be excluded too.”

Adrenaline junkies should check their chosen activities are insured while backpackers planning to work abroad should check the type of work they’ll be doing will be covered.


Local wi-fi will always be the cheapest option for travellers keen to keep in touch with home and most backpacking hostels offer wi-fi free or for a small charge.

Mobile phone networks all offer bolt-ons to cut the cost of using a mobile abroad but the best network for travellers is Three. Its free Feel At Home plan allows customers to use the internet and call and text home out of their UK allowance.

Feel At Home covers 18 destinations including Australia, Indonesia, Hong Kong and the US. Outside these areas, a local Sim card will be the best option to avoid excessive charges.