McCaughey was released in 1996. He appears to have become disillusioned with Paisley, allowing his membership of the Free Presbyterian Church to lapse by 1998. After his release he was approached by people in Ballymena who told him "Great job – pity you got caught", which he disagreed with. He declared himself "undecided" in the Good Friday referendum of that year: "I want to support this agreement. I want it to work, but don't want to be endorsing some republican plot." McCaughey became a member of the Progressive Unionist Party (PUP), the party associated with the UVF. He also started work as a self-employed builder.