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The risk with starting a business is that you won't bring in any income, but you aren't working right now, so the downside is reduced. Plus it'll look an awful lot better on your CV for the next job if you're doing something constructive. Would-be employers like gaps between jobs to be explained.

Since no one's suggested it, how about setting up a business? Given what you've said in the post (first child, significant equity in the house, savings pot), I'd guess that you're probably somewhere in your late twenties to thirties. That implies a reasonable amount of experience in what you...