Worried about redundancy? Financial advice can help
There’s no doubt that the pandemic has changed the way we think about our finances. Some of us have been lucky and our jobs have been largely unaffected, other than dealing with new ways of working. While others in industries such as travel, hospitality and the arts have been less fortunate. Worried about redundancy? Financial advice can help.
While the headlines surrounding anticipated record job losses have diminished in recent months, there is a feeling we are not out of the woods yet, especially if as expected, the Chancellor ends the furlough scheme in September.
The threat of redundancy no longer carries the stigma it once did, though with mortgages or rent to pay very few of us want to be the next ones to experience it. However, if you have been made redundant or fear that you could be made redundant in the future there are simple and practical steps you can take to minimise the impact on your financial well-being.
Establish a back-up plan
You may have saved money on travel, holidays, and other non-essentials during the lockdown. It’s generally recommended that you have sufficient funds set aside in an instant access account to meet your essential outgoings for at least three months.
Review your finances now
Check your monthly income against outgoings. Your bank may have an app to help you. Budget for the essential items such as your mortgage, food, utilities, and car insurance. Then consider what else is going out of your account and whether you can live without it. If you're worried about redundancy, financial advice can help.
Make sure you receive what you are entitled to
If you do lose your job, make sure you are receiving all the monies due to you. If you have been with the same employer for two or more years, there are rules covering this. If you are a member of a union or staff association, they will advise you or point you in the right direction for the right help.
Don’t pay more tax than you need to
Your employer may offer more than the statutory amount. Up to £30,000 is normally tax free – but holiday pay and pay in lieu of notice is taxed. If you do receive a lump sum, making an additional contribution to your pension is a really efficient way to reduce your tax bill.
You may be due a tax rebate, depending on the date your employment ends. Contact HMRC for help.
Don’t miss out on the benefits available to you
Whether you need the money or not, consider registering for the Jobseekers allowance. Depending on your circumstances, you may be eligible to receive credit for National Insurance. This will help to prevent any sizeable gap in your NI records which could affect your pension and other benefits in the future.
Is this a timely prompt to consider what you want do next?
Of course, much depends on where you are in life. Time for a career move, perhaps? Would you consider early retirement? Is it time to make that leap of faith and set up your own business? Take the time to consider your next move and how it will impact your future. If you're worried about redundancy, financial advice can help.