Last-minute departure · Sep 2026
End of the Earth
Peru · Bolivia · Chile · Argentina
July 21, 2026
2026 edition. Guidance reviewed: July 2026.
This article is general information, not personal financial advice. DECADES is not a financial adviser and is not authorised or regulated by the FCA. For anything specific to your own circumstances, speak to an FCA-regulated financial adviser or use Pension Wise, the free, impartial government guidance service for anyone with a defined contribution pension.
Most of the planning for a three-month trip is the enjoyable part: the destination, the route, the shape of the days once you’re there. The part people put off is the one that actually makes it possible, which is working out where the money comes from and what it does to the rest of your financial picture. That’s not a reason to hold back. Bookings from UK customers aged 60-plus are up 42% on pre-pandemic levels, according to Intrepid Travel, and a growing number of them are funding trips from pension drawdown, savings, or a combination of both, worked out well in advance rather than scrambled together the month before departure.
This piece is the companion to our cost breakdown of three months of travel, which covers what the trip itself costs. This one covers the layer underneath that: where the money comes from, how the timing of drawing it affects your tax position, and the questions worth taking to a professional before you commit to anything. It’s one part of our complete guide to how to travel for 3 months.
This is an explanation of how the pieces fit together, not a recommendation for what you should do with your own pension or savings. The distinction matters, and it’s a legal one in the UK: regulated financial advice means someone qualified assessing your personal circumstances and recommending a specific course of action. Guidance means explaining how things generally work so you can ask better questions. This is guidance.
If you want the regulated version, two free routes exist before you pay for anything. Pension Wise offers a free, impartial appointment (by phone or video call) for anyone aged 50 or over with a defined contribution pension, talking through your options without selling you a product. MoneyHelper, the wider government-backed service, covers savings, tax and budgeting more broadly. Both are worth using before you speak to a paid adviser, if only to arrive at that conversation with better questions.
Most people fund an extended trip from one of four sources, often blended.
Savings. The simplest option, where available: money that’s already liquid and doesn’t touch your pension or your income tax position at all. The trade-off is opportunity cost, since that money stops earning interest or growing while it sits ready for the trip.
Pension drawdown. Taking money from a defined contribution pension, either as a one-off lump sum or as part of your regular drawdown income. This is where timing matters most, because how and when you take it can affect your tax bill for that year.
Renting out your home. A growing number of retirees cover a meaningful chunk of trip costs by letting their property out for the duration, particularly through platforms built for shorter lets. This has its own considerations (insurance, mortgage lender permission if applicable, and the practical logistics covered in our guide to your house while you’re away) but for homeowners it’s often the single biggest lever available.
Investment income versus capital. If you hold investments outside a pension wrapper, there’s a meaningful difference between drawing income they generate (dividends, interest) and selling down the capital itself. Selling capital at the wrong moment is where sequencing risk, covered below, becomes relevant.
Most people use a blend: some savings, a modest pension drawdown, perhaps a few months of rental income. The point of naming the sources explicitly, before you book anything, is that each one behaves differently at tax time and each one is worth a specific question to whoever manages your pension or investments.
If part of the trip is being funded from a pension, four questions are worth asking a qualified adviser or a Pension Wise guidance appointment, ideally four to six months before departure rather than the week before.
Does this use my tax-free lump sum allowance, and have I used it already? Many pensions allow a tax-free portion to be taken, generally up to a limit that’s reviewed each tax year. Whether you’ve already used some or all of it, and on what terms, changes what taking more now actually costs you.
Does a larger withdrawal push me into a higher tax band this year? A one-off lump sum sits on top of any other income you have that tax year. Taking it in April rather than March, or splitting it across two tax years, can sometimes make a genuine difference to what you keep.
Does this trigger the Money Purchase Annual Allowance? Taking taxable income (rather than just the tax-free portion) from a defined contribution pension can, in some circumstances, sharply reduce how much you’re allowed to pay back into a pension afterwards. If you’re still working part-time or plan to keep contributing, this is worth checking specifically.
Does my provider need notice? Some pension providers process one-off withdrawals within days; others take several weeks, particularly for larger or first-time withdrawals. Finding this out in month five of a six-month planning window is considerably more comfortable than finding it out in week two.
None of these have a single right answer. They have a right answer for your situation, which is exactly why they belong in a conversation with Pension Wise or an adviser rather than in a generic article.
If any of the trip is funded by selling investments rather than drawing income, there’s a specific risk worth understanding: selling at a low point locks in that loss in a way that simply holding through a dip doesn’t. This is sometimes called sequencing risk, and it matters more for a one-off large withdrawal than for regular, smaller ones, because there’s less opportunity to average out a bad month.
The practical takeaway isn’t "never sell when markets are down," since nobody can reliably time that anyway. It’s that a large, one-off withdrawal for a specific trip is worth discussing with whoever manages the money well before the date you actually need it, so there’s room to plan around timing rather than being forced into a sale on a fixed deadline.
A simple framework worth applying to every part of your trip funding, before you book anything non-refundable: name the pot, check the tax-year impact, check the timing risk.
For each source of money you’re planning to use, name it specifically (this savings account, this portion of the pension, this quarter of rental income), then ask two questions about it: does moving this money change my tax position this year, and does the timing of moving it expose me to a risk I could avoid by moving earlier or later. Three sources, six questions, one afternoon with an adviser or a Pension Wise appointment. It’s a smaller task than it sounds, and it’s the single most useful thing you can do before treating the budget as settled.
The question that worries people most, reasonably, is whether spending three months abroad affects their UK tax position. For the overwhelming majority of retirees taking a single extended trip, the answer is no. UK tax residency is based on a set of day-count tests across a full tax year, not a single trip, and a three-month absence within an otherwise normal UK year doesn’t come close to those thresholds for most people. Any pension or investment income you draw while away is still UK income, taxed as it would be at home.
Where it’s worth checking specifically: if the trip is one of several in a pattern (a DECADES trip most years, say, or several months abroad most winters), or if you’re considering something longer than three months, it’s worth a specific residency check rather than assuming the same answer applies. HMRC’s own guidance and the Statutory Residence Test are the authoritative source, and they’re reviewed periodically, so it’s worth checking gov.uk for the current position rather than relying on a general article for the specific day counts.
This is where DECADES’ own experience is actually useful, separate from the pension and tax questions above, which are best left to the professionals. The practical logistics of having money accessible during a three-month trip are worth sorting properly before departure rather than mid-trip.
Set up any drawdown or transfer as a standing arrangement before you leave, rather than something you’ll need to log in and action from a hotel wifi connection in week six. If your pension provider or bank has security processes that rely on a UK mobile number or a physical card reader, check they’ll work while you’re abroad, or arrange an alternative in advance. Keep a buffer, separate from the trip budget itself, accessible through a card or account that isn’t reliant on the same provider as your main funding, so one login problem doesn’t become a genuine crisis. And if a large currency exchange is part of the plan, doing it in stages before departure rather than relying entirely on card rates abroad is often the more comfortable route, cost aside.
None of this replaces the tax and drawdown conversation above. It’s the layer that makes the money you’ve already planned for actually usable on the road, which is a problem entirely within DECADES’ own experience of long-term travel.
Does travelling for three months affect my UK tax residency? For most people taking a single extended trip, no. UK tax residency is assessed across a full tax year using day-count tests, and a three-month absence within an otherwise normal year rarely comes close to those thresholds. If the trip is part of a repeated pattern, it’s worth a specific check against the current Statutory Residence Test rules on gov.uk.
Will drawing a lump sum from my pension push me into a higher tax band? It can, depending on the size of the withdrawal and what other income you have that tax year. This is exactly the kind of question worth taking to a Pension Wise appointment or a financial adviser before you draw anything, since the answer depends entirely on your own numbers.
Do I need to tell HMRC or my pension provider I’m travelling? You don’t need to inform HMRC of a holiday or extended trip itself. It’s worth telling your pension provider and bank you’ll be abroad, both so security checks don’t flag unusual activity and so you can confirm any drawdown arrangements will keep working while you’re away.
What is Pension Wise, and is it free? Pension Wise is a free, impartial guidance service from MoneyHelper, available to anyone aged 50 or over with a defined contribution pension. It’s not financial advice and won’t recommend a specific course of action, but it’s a useful way to understand your options before deciding anything, and it costs nothing.
Should I speak to a financial adviser before I go? If pension drawdown, tax-year timing, or selling investments are part of your funding plan, yes, it’s worth it. A single paid conversation, or a free Pension Wise appointment as a starting point, is a small cost against getting the timing of a large withdrawal wrong.
Planning your own three months away? Start with the free DECADES Gap Year Guide: the practical starting point covering budgets, planning, health and everything between deciding to go and boarding the plane. Get your free copy here.
It’s easy to let the financial planning loom larger than it needs to. In practice, it’s a handful of specific questions (which pot, what tax-year impact, what timing risk) taken to the right person well before departure, and then a few practical steps to make the money usable once you’re actually away. Neither takes as long as it sounds, and both are entirely solvable months in advance rather than problems to carry with you.
Once the funding is settled, the far more enjoyable planning can take over: what the money is actually for. Our guide to managing your money day-to-day while travelling picks up exactly where this one leaves off.
About the author: Laura Cannon is the founder of DECADES. She has spent the past twenty years travelling solo and long-term across the world; experience she now puts into designing three-month experiences for people in retirement and semi-retirement.
Author
