Taking a career break: what do you need to consider?

Career breaks and sabbaticals are increasingly popular, and it’s easy to see why.

Having a career break allows you to recharge and reassess, pursue a new business idea or lifelong ambition, or travel the world without waiting until retirement.

However, extensive time away from the rat race does have its drawbacks.

Not only do you have to cope with an earnings gap, but your long-term career prospects may also take a hit.

Thirdly, and most often overlooked, an earnings gap can also mean a reduction in your pensions (both your state pension and private/workplace pensions).

If you’re considering taking a break, weighing up these costs and risks against the undoubted benefits of spreading your wings is important.

Here are some tips for planning your getaway.

Why and when might I take a career break?

The first thing to think about is why you want to do this.

Are you taking a break to find yourself, achieve something you can’t accomplish working full-time, have new experiences, develop your skills to change your career, travel, or something else?

Some career breaks may be thrust upon you by circumstances, but that doesn’t mean you can turn them to your advantage.

Taking a breather is most popular among professionals in their early–to mid-thirties, roughly the same time many people settle down to have families.

This may be because it’s harder to make the leap when you have dependents to support, but it may still be possible to juggle family commitments with a career break.

The most common reasons for taking an extended break are:

• Adventure: Going travelling solo or as part of a group, or taking part in a volunteer programme, etc.
• Starting a business: Going freelance or establishing your own company.
• Career change: Trying a different career path or new work experience, etc.
• Redundancy: Following a recent redundancy with a substantial pay-off.
• To care for a family member: Supporting loved ones, end-of-life care etc.
• To look after children: Save on childcare costs, spend quality time and help support family, etc.

If you are considering going travelling, you can find out everything you need to know about travel insurance and what cover you'll need here.

Consider your reasons for having a career break, and list the things you hope to achieve by it.

Now, you can start to consider the risks and drawbacks.

What should I consider before taking a break or sabbatical?

If you’re in a job you enjoy or one with a lot of advantages, talk to your employer to see if you can negotiate a period of unpaid or even paid leave.

Some employers grant occasional sabbaticals to key members of staff, so if yours is a senior role, it’s worth asking especially if you plan to develop your skills during the break.

If your main reason for wanting a break is job dissatisfaction, consider it carefully and don’t make hasty decisions.

Give yourself at least three months to consider your options, and during this time, seek advice from those around you.

Again, speak to your HR department to see if you can find alternative solutions to leaving.

In all cases, draw up a game plan for how to spend your break and what you aim to do when it’s over.

Will you be returning to the same line of work or hoping to break into a new one? What are the main challenges, and how will you rise to them?

Now might be a good time to assemble any necessary references and job application materials so you have them ready.

Most importantly, consider how your finances will cope with a career break.

How long can a sabbatical be?

The typical length of a paid sabbatical is six months. However, the length will depend on what you can negotiate with your employer.

You may be able to negotiate a longer sabbatical if some of it is unpaid, but your employer does not have to agree.

The most important thing when arranging a sabbatical is to get your agreement in writing.

You don't want to return to find that you have no job anymore.

Financial preparations for a career break

You shouldn’t consider a career break unless your finances are robust.

Ideally, you should be debt-free, and if you have a mortgage, you must be certain that you have the means to keep up repayments.

If you’ll be away from home during your break, one way to do this might be to sub-let your home. You’ll need to let your mortgage provider know.

Save as much as possible before your break and pay off any debt.

If you have any investments, talk to your adviser about possibly moving some of them into cash if you need more accessible funds.

Work out your likely living costs for your break and see if your savings will cover them.

If not, calculate the shortfall and plan how to overcome it, including freelance or temporary work or saving more.

Finally, ask yourself whether you are really comfortable spending your savings this way. It's worth talking to a financial adviser if you’re not sure.

Career breaks and your pensions

One easy-to-miss financial impact of a career break is the effect it can have on your pensions.

A pause in your earnings also means a gap in pension contributions, and also a loss of national insurance contributions which may reduce your state pension entitlement.

Both can significantly reduce the level of your income in retirement.

Talk to your adviser about making additional pension contributions now or when you return to work to offset this effect.

You may also be able to make voluntary national insurance contributions to regain more of your state pension entitlement.

Can I work during a career break?

If you need additional income during your career break (or if you just like to keep busy), you can, of course, do any other work you’re able to.

This is true even if you’re on a sabbatical and still technically employed.

All you need to remember is any extra income you earn will be in addition to any sabbatical income, so make sure you pay the right amount of tax on it.

If your reason for taking a break is to start your own business, our guide to starting a business should help.

What are the main advantages of taking a career break?

A career break can improve your long-term prospects if you use it wisely.

Time off can present new opportunities, potentially leading to future career prospects, enriching life-changing experiences and meaningful friendships.

Or it may simply be that with fewer work stresses, you can spend more time with family, concentrate on your mental and physical wellbeing and pursue new interests.

Planned properly, a career break can ‘re-boot’ your life and put it back on the right track.