On a typical offshore regular savings plan held by an expat, a premium holiday is a temporary pause in your regular payments while the plan itself stays open and the money already invested generally remains in place. It may help if your income drops for a while or you have a large one-off cost. However, a pause can affect the plan's value and your end goal, and whether you can take one, and for how long, depends on your policy's terms.
How a premium holiday works
Many regular savings plans sold to expats are built around a set monthly or annual premium over a fixed term. Where the plan allows it, a premium holiday lets you stop paying for a period, then restart. During the pause, depending on your policy:
- The plan will usually stay in force.
- The money already invested normally stays invested in your chosen funds.
- The plan's ongoing costs generally continue.
- You are not adding new money, so the plan has less working for you.
At the end of the holiday you restart payments, sometimes at the original level and sometimes at a different level if your plan allows.
Premium holiday versus paid up
These two are easily confused:
- A premium holiday is a temporary pause with the intention of restarting.
- Making a plan paid up generally means stopping payments permanently. The plan remains invested until you cash it in or it reaches its end date.
Some plans set a maximum length for a premium holiday or a minimum period of payments before one is allowed. If you do not restart when the holiday ends, the provider may treat the plan differently under its terms. Check what happens in that situation before you begin.
What it can mean for your plan
These plans are often expensive and frequently sold with high upfront commission, which is why the value can look lower than what was paid in, especially in the early years. Pausing does not change that, and because costs generally continue while contributions stop, the value can grow more slowly or fall during the holiday.
The bigger effect is often on your end goal. The longer payments stay below the planned level, the further you may move from your target, and the more you may need to save later to catch up. A short break may make little difference to your long-term outcome. A long one, or a series of them, may make a large one.
Your policy documents set out how a premium holiday works under your plan. Our guide to this type of plan explains how these policies are generally structured.
What to check before you pause
Ask the provider, in writing:
- Does my policy allow a premium holiday, and are there any conditions?
- What is the maximum length, and can I take more than one?
- What happens if I do not restart at the end?
- What is the projected value at the end of the term if I pause for, say, six or 12 months, compared with continuing?
- Can I reduce my premium instead of pausing completely?
Comparing those projections with your budget gives a clearer picture than a decision made under pressure. Sometimes reducing payments, rather than stopping them, may be a better fit. In other cases, the plan itself may no longer be right for you and a wider review makes sense.
Worked example
Illustrative example only, not a real client.
Lucy pays $800 a month into a 25-year plan she started six years ago. She is between jobs and expects to be back in work within six months. She asks the provider for three projections at the end of the term:
- Continuing payments as normal
- A six-month premium holiday, then restarting at $800 a month, so $4,800 ($800 x 6) is not paid in
- Reducing to $400 a month for six months, then returning to $800, so $2,400 ($400 x 6) is not paid in
Projections are based on the provider's assumptions and are not forecasts. Seeing them side by side, she can judge how much each option may affect her end value and choose the one that suits her budget. Because she has a clear restart date, a short premium holiday may be workable for her. If her income was uncertain for longer, a broader independent review might be more useful.
If you need to complain
If you are unhappy with how a request is handled, raise a formal complaint with the provider first. For insurers licensed by the Central Bank of the UAE, Sanadak may be able to consider complaints once the company has had the chance to respond. Insurers based elsewhere set out their own complaints routes in the policy documents.
Common mistakes
- Stopping the direct debit without arranging a premium holiday with the provider.
- Forgetting to restart when the holiday ends.
- Taking repeated holidays without checking the effect on the end value.
- Assuming a premium holiday and a paid up plan are the same thing.
Sources and further reading
If you are thinking about pausing your plan, request a free independent policy review from a regulated financial adviser to understand your figures and options.
Last reviewed: October 2026. Tax year: 2026/27. Jurisdictions covered: UAE, UK. Rates, legislation and guidance change, so recheck before relying on this. Rules can differ between England and Wales, Scotland and Northern Ireland; tax residence is fact-specific; treaty outcomes depend on residence, domicile or nationality provisions; examples are simplified and omit reliefs, costs, exchange rates and anti-avoidance rules. This is general information, not financial, tax or legal advice. Take advice in the relevant country before acting.