A career break can be a power move. A pause from work can help you rekindle your passion for the job, uncover a new career path or simply get on top of things at home. For those who are burned out, it can be sanity-saving.
Forgoing salary is expensive clearly but financial planning will relieve anxiety, enabling you to make the most of your time off.
You’ll do plenty of soul-searching before walking away from a salary, says career breaker “Marie”. With 20-plus years’ experience working with multinationals in the tech sector, she resigned from a director-level role earlier this year.
Taking the time to fully understand why she needed the break bolstered her belief that resigning was the right choice.
“Understanding and really feeling the ‘why’ before you decide to hand in your notice is crucial, and will give you confidence to do it,” she says. “There will be a lot of people out there who will think you are crazy.”
Nearly 62 per cent of employees have taken a career break at some point in their professional career, according to a 2022 LinkedIn survey of 23,000 workers and 7,000 hiring managers. More than a third would like to take one in future, according to the data.
Instead of being a CV taboo, impacting future employability, a pause in work can show you are intentional about your career and not afraid to back yourself.
“We see women in particular leaving corporate life either to take a career break or start something completely new,” says Ciara Garvan, founder of learning and recruitment company, WorkJuggle.
“People are living longer, healthier lives. They can potentially have two or three careers in them and a sabbatical [or career break] can enable that,” says Garvan.
If you haven’t fallen completely out of love with the job, but need a break, exploring leave options with your boss can be a less financially punitive off-ramp.
“Absolutely, check your company’s HR policy first,” says Marie. “Maybe you only need a month off, or a limited period like three months rather than quitting outright. If you feel comfortable explaining why you need time off, definitely have the conversation with your manager,” she says.
The pandemic brought a big shift in people’s priorities. Recruiter Adecco has since identified sabbaticals as one of the top five workplace trends. Workers are prioritising employers, like the public sector and charities, that offer sabbaticals, according to the Chartered Management Institute UK data, published in August.
Parents can avail of unpaid parental leave, taking up to 26 weeks off before their child’s 12th birthday, or 16th birthday where the child has a disability. Carer’s leave to look after a family member, friend or colleague is also an option. It’s unpaid, but your job will be kept open until your return. With enough PRSI contributions, you may be entitled to Carer’s Benefit during the time away from the job.
Squirrel funds
Working out a financial plan can make you more confident about taking a career break, says financial planning consultant Daniel Hardiman, of Hardiman Life & Pensions.
“If you break down the numbers with a financial planner, it will reduce the stress and anxiety of such an important life decision and enable you to enjoy your career break so much more,” says Hardiman.
He describes one client, earning €40,000 before tax, taking a career break for family reasons. “She was bringing in €2,600 a month after tax, but her childcare costs of €1,600 were eliminated. After this saving, the loss of income was only €1,000 a month and she had built up €12,000 in savings to cover that,” says Hardiman.
Saving a portion of your salary every month before taking the career break means you can “pay” yourself while you are off.
“Once I decided that the work situation was not for me, I saved as much as possible from my salary,” says Marie. “I set a target of how much I would need to support myself for at least nine months, calculating my average monthly outgoings, multiplied by nine.”
With a regular salary coming in, your spending can get flabby. “When you are working in a high-pressure job, expenses can easily trend upwards,” says Garvan. “Takeaways, meal delivery services and bottles of wine can all be necessary to make it through the week.”
She took time out of work over 10 years ago. Being off work can means you spend less, she says.
“By not working, you will claim some of your time back. You may not be so stressed that a bottle of wine on a Friday is a necessity. You’ll have more time to plan your meals and cook at home. Your [financial] ‘burn’ rate when working can be very different from when you are at home,” says Garvan.
Use your banking app to calculate your monthly spending on “needs” and “wants”. Food, mortgage, rent and utilities are clearly non-negotiable, but scaling back on “wants” can save a surprising amount.
“Once I decided to leave, I reduced my outgoings and I have stuck to that,” says Marie.
“I reviewed and cancelled TV subscriptions and now use free trials where I can. I am more careful with food shops, making lists and rough meal plans. I reduced my coffees and eating out, I cut back on new clothes and shoes. I’ve taken one short holiday abroad. I joined libraries so I can borrow books. Basically anything that’s not essential to living or our wellbeing, I cut.”
Using comparison sites, she found better deals on electricity, gas, broadband and her mobile phone. “I checked when I would be out of contract and switched to better offers that would save me money.”
Those taking a career break should give themselves a six-month financial cushion, says Garvan. “Unexpected bills come in the form of things like [broken] boilers. If you have not allowed for these, your stress rates can go right back up again.”
With the average adult paying €1,685 a year for health insurance, according to the Health Insurance Authority figures, losing employer-paid cover can be costly. Company group schemes can be cheaper than alternatives, so ask the insurer about keeping that discounted rate before leaving.
“We offer the opportunity to continue with the same cover when you leave the scheme for a career break,” says Irish Life. This can mean a valuable group scheme discount of up to 10 per cent.
If you can’t afford the premium any more, regulations allow you to take a 13-week break in cover without the need to reserve waiting periods. Claims won’t be refunded during this period however, says Irish Life.
If you are taking temporary leave, talk to your manager about continuing health cover while you are off.
Pension gap?
If your employer contributes to your pension, resigning or taking some forms of leave, will nix this. While a gap in contributions can seem small at the time, the compounding nature of pensions means any gap becomes larger over time, says Irish Life.
“Women taking time out of the workforce, usually for maternity or caring responsibilities, is one of the two main drivers of the 36 per cent gender pension gap,” says an Irish Life spokesman of the company’s gender pension gap research.
On the flipside, your time is valuable currency too. You’ll need to wager whether a future pension payout is worth the trade of your health and personal fulfilment now.
One way to counteract the gap in pension is to pay some additional voluntary contributions (AVCs) one to two years in advance of taking a career break or when you return to work, says Hardiman.
“You get up to 40 per cent tax relief on any AVCs you make and this could make up for the lack of contributions while you are on a career break,” he says. It won’t make as much sense to continue contributing to a pension while you are off work as you won’t get the tax relief on contributions at a time when you are not earning income.
Those taking a career break to care for children under 12, or a person with a disability over 12, should apply for the Homemaker’s Scheme. This can bridge your PRSI contribution gap, helping you to qualify for a State pension, or get a higher rate.
If you’re lucky enough to benefit from a share scheme at work, the timing of your resignation will be important. “If you keep the shares for a minimum period of three years, you will be exempt from income tax and you will just have to pay capital gains tax if the shares rise in value,” says Hardiman.
“I sold off whatever company shares I had and transferred the money into my job-quitting/career break fund,” says Marie.
Share prices in the tech sector in particular have risen significantly in the past 10 years. “Over a career of five to 10 years with a multinational, share options can result in a significant lump sum windfall that could fund a career break,” says Hardiman.
“I would encourage all employees of multinationals to make maximum use of these share schemes,” he says.
Apply for social welfare.
If you quit your job, can you still apply for Jobseeker’s Benefit? The answer is yes, but you won’t get paid for the first nine weeks. After that, it’s paid for nine months for those with the requisite number of PRSI contributions.
It is paid at a maximum individual rate of €232 a week through the post office. Apply for Jobseeker’s Benefit the first day you become unemployed.
Free stuff
Stepping out of the rat race can mean time to explore new areas of interest and a chance to reskill. Or not.
“If someone is burnt out, then a complete break is beneficial,” says Garvan. “Otherwise, we would encourage people to stay in touch with their network and push themselves to do new things. It’s a great time to upskill, whether as part of a bigger career move, or just for fun.”
Living on a reduced budget, needn’t be an obstacle, says Marie.
“I’ve taken up free adult education courses, Springboard courses and local free events and activities. I signed up to the National Library and Trinity Library, I check free exhibitions and anything that grabs my interest,” she says.
Springboard provides free higher education courses to reskill people in growth areas. Examples include free postgraduate qualifications in healthcare innovation at Trinity College Dublin, or in sustainability and climate action at UCC.
“People have a number of careers in them and a career break can enable that,” says Garvan. “In terms of people who are burnt out however, we rarely see them re-entering the corporate space. Burnout can be hugely debilitating.”
