Many of us will have fantasised about a well-timed break from the professional treadmill, imagining what we could do with all that time to focus on ourselves or our families. Some might even have thought about rolling the dice again and retraining in a different field.
Career breaks are growing in popularity among high-earning professionals, for both men and women. A LinkedIn survey found that nearly two-thirds of employees have taken an extended break from their careers. In the UK, around 90,000 people now take a career break each year, according to the Chartered Institute of Personnel and Development. What started as a necessity for caregivers has evolved into a luxury.
Emblematic of this new cohort of career breakers is 39-year-old Greg Whittaker. He decided to quit his job as a senior legal recruiter last year after a difficult (but ultimately successful) IVF journey. He wanted to spend more time with his young children, prompting his career break — sometimes dubbed a “grown-up” gap year.
“I felt I was missing more than I wanted to of their young lives,” he says. Money, after all, isn’t everything and he had built up a financial buffer.
Yet even for those who can afford to take a break, the question of money looms large.
After eight months off, the financial toll has started to sink in for Whittaker. “[The break] has eaten into my savings quite considerably,” he says. Rather than return to formal employment, he’s now starting his own recruitment business.
It is a difficult balancing act. As we live and work for longer, career trajectories are becoming less linear. The push from some companies to spend five days in the office is also bringing the matter to a head for some employees.
The problem with career breaks is the outsized financial gamble often involved; something that mothers who have taken time off know all too well. Unlike a sabbatical, there is no safety net when you quit.
So what is the cost of a career break? And is there a way to limit it?
Even a conservative estimate for the cost of a career break produces some very high numbers. According to consultancy Barnett Waddingham, for an average worker in their 30s earning £28,600 — and forecasting just a 3 per cent increase every year until retirement — an unpaid two-year gap translates into a £30,688 shortfall in their pension by the time they get to retirement.
But that does not quite capture the totality of the impact. In 2016, Washington-based economist Michael Madowitz and his mathematician wife searched online for exactly how much it would cost them to temporarily stop working, having recently become new parents.
They could not find any existing resources that could comprehensively calculate the financial impact of time out of work on their pensions, income, social security, as well as missed opportunities for promotions over a lifetime.
So they made their own modelling tool and made it available online, allowing individuals to calculate the long-term financial cost of a career break.
I put it to the test. I told the calculator I was a 30-year-old male American, currently earning $150,000 after nearly a decade in the job, and planning to take a five-year career break when I turned 45. Maybe my fictional man wanted to travel the world or simply take time out with friends and family, before swapping careers.
It found that, over a lifetime, he was looking at more than $1.4mn in lost wages and retirement benefits, assuming a retirement age of 67 and a 5 per cent employer pension contribution.
“The numbers get so large, it can be hard for non-finance people to believe them,” Madowitz tells the FT.
Even after a six-month break, it ended up costing my fictional man an entire year’s worth of salary over a lifetime.
Madowitz stresses that he does not want the calculator — which was designed to spotlight the economic toll of inadequate childcare services in the US — to deter people from taking a career break, but rather to “give families a factual baseline to have honest conversations about trade-offs and what each parent wants”.
In particular, parents should discuss what happens if their marriage ends, he says, to account for the long-term economic penalty awaiting the person taking the career break.
“Looking for childcare is not really the time to broach ‘what if we get divorced’,” he says. “[Yet] the differences in financial security for those that stay in the labour market versus those who took, say 5-10 years out, [are] pretty stark.”
It is not just for parents; these tools can also be illuminating for young people like Tom. As a single man in his 30s, he took a career break to go travelling this year because he had money to spare and had little immediate use for it. “I’d saved up a lot of money in my 20s to buy a house in London, but effectively, that money without a partner was useless . . . I couldn’t afford anything [that I wanted],” says Tom, who asked the FT not to use his real name.
He is among a booming number of millennials taking career breaks. In the UK, more than half of those under 34 expect to take an extended hiatus from work at some point, according to consultancy Barnett Waddingham. In the US, cited by the World Economic Forum in 2016 found that more than four in five Americans under age 44 expect to take a hiatus from work at some point. It has even spawned a new label: ‘micro-retirement’, where young people take up to a year off to make the most of their existing funds.
Tom has decided to spend around a third of his savings on his break, and has estimated he can take around a year out of work. He said he focused on calculating how to fund his time out, but not its total impact on his lifetime earnings.
He is also now thinking ahead to his next source of income, with plans to take on some consultancy work to “top up” if needed, towards the end of his trip.
This is key, given that how quickly returners can find a new job (and how long they lose their income) impacts how economically punitive their break is.
This is something Ryan, 30, has struggled with, having left an ad-sales job at Google in Ireland more than three years ago to focus on his physical and mental health. “As someone who’s taken quite a long time off, it’s been tricky to get back into tech,” he says; he’s been job hunting for the best part of two years. In the meantime, he’s been taking short-term gigs outside tech to keep him afloat.
This is not unusual for career breakers — even for those in professional services and with extensive qualifications. Harvard Business School research in 2020 found that almost half of employers across the US, UK and Germany automatically “weeded out” skilled candidates simply for having CV gaps of more than six months. That means there is still stigma to the break.
On top of that, older career breakers may find that their age adds further stigma.
“We still find ageism embedded in recruitment processes,” said Stuart Lewis, the chief executive of Rest Less, a digital community for the over-50s. One poll by a recruitment agency last year found that British employers considered 57 to be “too old”.
This comes as a wave of older people are returning from a work break (or early retirement) in places like the UK. Despite fears around an ageing population, there has been a “sharp and statistically significant uptick” in 50-64 year olds rejoining the British workforce post-pandemic, according to the Institute for Fiscal Studies.
Traditionally, the “career break penalty” has fallen on mothers, who are still the most likely group to take planned time off. In the UK, around 1.5mn women are not in paid employment for caregiving reasons, the latest data from the ONS shows; many of whom will return to work.
One academic study focused on women recorded a 37 per cent average salary drop after three years or longer out of work. Another found that women’s odds of getting a first-round interview after three years out were slashed in half. Perhaps unsurprisingly, 70 per cent of women in business are anxious about taking a career break, according to the London Business School.
Schemes like “returnships” have sought to alleviate these challenges. These are in effect a mid-career internship designed to help reintegrate white-collar workers after a year or more away. Returnships — usually lasting 12 weeks and fully paid — are pitched as a way to boost workers’ professional confidence, as well as extensive upskilling with the hope of a job offer at the end.
First introduced in the early 2000s by US investment banks, they later became commonplace at large corporations in the US, UK and India and were heralded for boosting diversity. A wave of optimism enveloped these “back to work” programmes; everyone from EY to Deloitte to Lloyds has adopted them, as has the Bank of England. In the US, there are 100-odd corporate schemes to pick from across the Fortune 500, including IBM, Intel, and PepsiCo.
Yet the number of total available placements remains tiny. For instance, UK engineering company Tideway took on seven returnees in the first year, and just three the following year. French multinational Schneider Electric recorded just 36 returners since 2022 in the US. Even at the very top of the scale, JPMorgan saw 115 people join their global “ReEntry” intake in 2023. The figures are similar in the public sector. The UK civil service — one of the nation’s biggest employers — initially opened 50 spots in 2018. Utah State University’s own programme saw 42 returners graduate between 2021 and 2023.
As a result, acceptance rates are tough, historically standing at 2.5 per cent at General Motors for instance, and around 2 per cent at Goldman Sachs.
Geetha Vijay, a data analyst in India, says she has applied for more than a dozen returnships after taking several years off work to care for her young son. Several never replied. The one interview she was offered did not progress beyond the first stage.
“While it’s fantastic that more companies are recognising the need to support women returning to work, the reality is that returnships are not the scalable solution many hope for,” said Amelia Miller, co-founder of back-to-work platform ivee. “They remain highly competitive — even the largest organisations can only offer a handful of spots.” She has now found a job, not through a returnship.
Statistically, most career breakers will not get on to a returnship, acknowledges Carol Fishman Cohen, chief executive of iRelaunch, a global return-to-work community with more than 100,000 members.
Tighter budgets and hiring freezes in recent years have likely played a role. Returnships are not cheap to run either as candidates — almost by definition — require extra support and training. That also tends to deter smaller businesses from offering such schemes. Political pressure has dwindled, too. After the pandemic, the UK government scrapped plans to support thousands of extra returnships specifically for the over-50s.
Nonetheless, Cohen argues that businesses report strong returns on investment from these schemes. This is because returners are “stickier” employees on average, according to data her company collects. Returner retention stands at 70-90 per cent. Returners are also highly skilled, motivated and experienced, Cohen adds, often in contrast to entry-level staff.
“It started as a DEI [diversity, equity, and inclusion] tool but now it’s a smart talent acquisition strategy,” she said.
It may be overly simplistic to put a definitive price tag on something that can provide a significant emotional boost as a career break. Whittaker, for instance, says he has no regrets — despite the financial headaches.
There are, however, some prudent guardrails to consider. In particular, prepare for the break to go on longer than you intended, says UK-based career and burnout coach Deena Priest.
“Many people underestimate how long it can take to find the right role after a break. Particularly one that aligns with their values, pays well, and allows for the lifestyle shifts they’ve made during their time off,” she says. A break does not always involve an earnings dip in a new role, she says, but it is common.
Meanwhile, those taking longer breaks should consider taking courses to upskill. “These small but strategic investments go a long way in maintaining your professional currency and making your return smoother,” Priest adds. That also includes staying connected with your network while you are away.
Ultimately, says Cohen, a career break is rewarding, but it can come with invisible strings attached. “It’s still not easy [to be a returner],” she says. “It’s good to go in, eyes wide open.”
Have you taken a career break or decided to retrain in a different sector? If so, would you recommend it? Please share your experience in the comments below.
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