Ensure your backpacking doesn’t cause a gap in your finances

I remember it as if it were yesterday; the dry mouth, beads of sweat on my forehead as I opened the envelope containing my A-Level results. In a couple of days, thousands of young Londoners will come to know this same nervy sensation all too well.

It is a big deal of course, one of the key signposts in your life pointing you to your future career and prospects. But it also marks a great opportunity to take a gap year, to travel and to experience.

If you’re lucky enough to be able to take a gap year, you will get the most of it if you take care of the finances first. Working for a few months to raise the cash is a given but where you put it once earned, and which cards, insurance and mobile-phone packages you arm yourself with for your time away can be crucial to how far you get and what you can do. Slumming it in youth hostels is all part of the gappers experience but the odd treat can make the memories.

You can save up to £5640 a year free of tax in a cash Individual Savings Account. The best buy at the moment with unlimited withdrawals is the online Santander Direct ISA (issue 10) paying 3% on deposits of more than £500.

This includes an introductory 2.5% bonus for a year but by that time you will be on your hols. As for credit card, Nationwide Select Card offers interest-free purchases for 12 months as well as unlimited commission-free purchases abroad, although this is only open to Flex current account customers.

Using a mobile in far-flung locations can be expensive so get a local SIM card for texts and calls and if you take your own phone don’t forget to turn off data roaming when not on the web.

Above all get adequate travel insurance: ensure it covers the area you’re going to and that it covers more than 30 days overseas a year. Insure & Go’s Backpacker Light policy costs £163.71 and gives cover for up to three bungee jumps. Surely enough excitement for any gap year.