If you are about to dispatch a child on a gap year before they start university, how should you suggest that they manage their money along the way?
The average cost of a year exploring aboard comes to something in the region of £4,000 (depending on which study you look at). That means you might want to start by suggesting they stay at home and work until Christmas. Then, once the money is at least part earned, you will want to suggest the best instant access savings account as a hub for gap-year finances. So what are the best ones around at the moment? You can get 3.06% at the Derbyshire Building Society (online) or 3% at Santander.
That done, you'll need to think about how the money should be carried around the world. This used to be all about traveller's cheques, but these are now, as The Times put it, "old hat". Instead, adventurers need pre-paid cards. These can be used just like debit cards or credit cards (they tend to be either Visa or Mastercard) you can pay for things with them and withdraw cash with them anywhere at all but as they're loaded with cash in advance, you can't overspend on them.
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Caxton FX and FairFX are the leaders in the field in Britain. Both let you load the cards with either euros or dollars, and Caxton also lets you load up with sterling. Neither charges for the use of the card (so no fees when you spend) and both let you top the card up from your bank account as and when you like, fee free, online or by phone. FairFX charges for cash withdrawals from ATMs (£1.50 or £2). Caxton doesn't.
While pre-paid cards are a must, it's also a good idea to load your teenager's wallet with an emergency credit card too. If you feel comfortable giving your child a card on your account that's a good option. For the 99% of you who don't, however, Laura Whateley in The Times suggests cards with low foreign usage charges. The Halifax Clarity card offers fee-free foreign usage and no charges for withdrawing cash from an ATM.
Finally, there's travel insurance. One-quarter of young people fail to get this when they travel, but if modern gap years are anything like mine was, it should be seen as a necessity. Ordinary travel insurance won't work as it limits the number of days you are covered for.
However, Moneysupermarket.com lists several policies that make the grade for around £100 for a year for an 18-year-old man or woman: Infinity has a policy for £73, for example, and Insure and Go has one priced at £80.
The Foreign Office has a gap year guide Plan. Pack. Explore. You can download it free at www.fco.gov.uk/en/
