With rising inflation and financial uncertainty, redundancy is a concern for many. While it’s a stressful prospect, taking practical steps now can help you feel more prepared and secure if the unexpected happens.
Create A Plan B
Start by setting aside at least three months worth of essential expenses. It doesn’t have to be your full salary, just enough to cover the essentials like mortgage payments, food, and utility bills. If you can cut costs in the meantime, even better—every little helps…
Review Your Finances
Get to grips with your spending. Look at your income and outgoings, then create a budget that prioritises essentials. Many banking apps now offer tools to track and categorise your spending, making it easier to spot areas where you can cut back. Download our free Budget Planner to help see what’s coming in and out.
Know Your Entitlements
If redundancy strikes, ensure you’re receiving what you’re owed. For employees with two or more years of service, statutory redundancy pay is based on age, length of service, and weekly salary. Remember, the first £30,000 of redundancy payments is tax-free, but holiday pay and notice pay are taxed as normal.
You might also consider asking your employer to pay part of any lump sum into your pension, reducing your tax bill and boosting your retirement savings.
Check for Benefits
If you’re unemployed, registering for Jobseeker’s Allowance not only provides financial support but also helps protect your National Insurance record, safeguarding your future State Pension entitlement. Be mindful, however, that savings and redundancy payouts may affect eligibility for other means-tested benefits.
Think About the Future
Redundancy can also be a chance to rethink your next steps. Whether it’s early retirement, starting a business, or retraining for a new career, understanding your financial position is crucial. Your redundancy payment could be a lifeline to help fund these changes, but remember to replace any benefits provided by your employer, such as life insurance or income protection.
We’re Here to Help
Redundancy is a challenging time, but you don’t have to face it alone. At Willow Tree Financial Services, we’re here to guide you through the process—whether it’s creating a budget, planning the most tax-efficient way to use your lump sum, or keeping your retirement plans on track. Together, we can make sure your short and long term goals remain secure and achievable.
If you’d ever like to book a financial planning meeting with an adviser. get in touch with me here or book directly onto my calendar here.
Willow Tree Financial Services is a Financial Adviser firm based in Polegate, East Sussex, UK. We specialise in Financial Planning, Mortgages, Investments & Pension Planning, Protection & Insurance Wills, Trusts & Estate Planning.
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