Redundancy: a financial survival guide

22 Aug

3.5 million employees, or one in seven workers, have been made redundant since the start of the recession in 2008. It can be a devastating experience, leaving you with the not just the loss of an income, but also a way of life, friends and the experience accumulating whilst in the position.

When you are given the news that you’ve been made redundant, there are few things you need to do so don’t panic and try to keep your cool. Firstly, make sure you collect your P45 and have written details of your redundancy terms and package. If there is anything to don’t understand, ask. Before you leave, collect contact details for your line manager, the human resources officer, pension fund trustee and trade union representative if you belong to one.

Your first thought is probably about the loss of income, but there are ways to get by in the short term. You might want to consider taking out a loan from a payday loan lender like Wonga in an emergency situation like redundancy, as things can get tight while you are waiting for your big redundancy payout! Visit them to see how much you can borrow, over how many days and the cost.

You will also receive redundancy pay, either from your employer or from the government if the employer has gone in to receivership. The government have an online tool to calculate your redundancy payment. Statutory redundancy is

•               half a week’s pay for each full year you were under 22 years old

•               one week’s pay for each full year you were 22 or older, but under 41

•               one and a half week’s pay for each full year you were 41 or older

The maximum amount of statutory redundancy pay you can currently get is £13,500, but your employer might have a more generous scheme. It’s also worth noting that redundancy pay under £30,000 is not taxable.

You might also be entitled to benefits including Job Seekers Allowance. Check on-line for what you might expect to receive. Some local council offer support schemes and there are also grants available in some situations. Call your local council to see what they can offer.

Another step is to check your insurance policies, credit card and mortgage. If you’re lucky, one might have a redundancy pay-out in the small print. You’ll need to inform your car insurance firm and talk to your mortgage lender.

This all sounds desperately dismal, but after the initial shock, look to the future. Network with people using sites like LinkedIn and use your free time to study, learn a new trade, visit friends and family that you’ve neglected, or even take a holiday. Think about your previous employment and analyse what you like and didn’t like; this might give you some pointers to your next career move. Re-write your Curriculum Vitae and send it to all the employment agencies in your field.

Remember that:

•               Someone once said, “It’s your job that’s been made redundant, not you”.

•               It’s fine to ask for help and support

•               This is an opportunity to improve your life

•               Don’t feel sad, feel empowered

•               You are one in seven, a member of a very large club.

 

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