With many companies across the UK announcing mass layoffs being made redundant is a very significant risk for thousands of workers throughout the country. A drastic change in circumstances like this can be one of the many ways unmanageable debt starts to creep up and eventually take over.
This article will outline some of the steps you should take if you find yourself out of a job. It isn’t easy to keep up with your financial commitments, especially if you don’t have anything saved. However, there are certain steps you can take to make the process as painless as possible.
1. Make sure you get your redundancy pay if you’re eligible.
If your employer has decided to make you redundant you hold certain rights which can mean more money for you and even paid time off to look for a new job.
If you have worked for your employer for at least two years, you’ll be entitled to a lump-sum redundancy pay package. The amount you’ll receive depends on your age and the length of time you’ve been with the business:
- 21 and under: half a week’s wage for each full year you worked there
- 22 and older: full week’s wage for each full year you worked there
- 41 and older: One and a half week’s wage for each full year you worked there
It is worth noting that if you worked in a company for say, three years, and one of those years you were 21 and the others 22 and 23 then you’ll take home two and a half week’s wages; the lump sum is dependent not only on what age you are when you leave, but what age you were while you worked there.
You should also take the time to work out how much money the company owes you outside of this redundancy package. Any outstanding pay, holidays, or expenses for various other things should be calculated. Your employer may do this without your interference, although be prepared to ask.
This little care package can give you some much-needed breathing space when you’re looking for a new job. Speaking of which…
2. Take advantage of opportunities for paid time off.
If you have been made redundant, your employer must allow you to take paid time off work to look for a new job. This is limited to 40% of your normal working schedule, meaning that if you work a five day week you can have two days off to go to interviews etc.
It is important to keep your employer in the loop as to how long you’ll need and when you need it, always giving as much notice as you can, but you are entitled to this provided you are not essential to the running of the company.
Use your time wisely, and hopefully you’ll have a new job lined up before you finish up in the job you’re leaving!
3. Work out what benefits you might be eligible for.
It doesn’t occur to many people that they may be eligible for benefits, but they can be a welcome help if you have been made redundant.
While you’re trying to find a job you may be eligible for:
- Job seeker’s allowance
- Universal Credit
- Housing benefit
- Working tax credits
- Child tax credits
Many of these benefits can be applied for online. The money you’ll get from these is unlikely to be close to your wage from your prior job, but they can be key in helping to meet your ongoing financial commitments.
Remember – there is no shame in being on benefits. This is exactly what they are there for, to offer some additional support until you are back on your feet.
4. Start looking for a new job straight away.
This should be of no surprise to anyone but getting a job with a steady income should be your first priority. If you have financial commitments that are in danger of getting away from you then getting a new job is absolutely necessary. Savings, if you have any, will not last forever and your redundancy package may not be that extensive.
Resources like the job centre can be incredibly useful in this regard. They have a programme specifically for getting those who have been made redundant back to work called the Rapid Response Service (RRS).
If you get in contact with the job centre, make sure they know you have been made recently redundant, you can use the RRS throughout your notice period and up to 13 weeks after.
Don’t be overly picky, remember that money is money, and the alternative of letting your debt become completely unmanageable and getting into a position where you simply cannot hope to pay it back is surely worse than working a job that isn’t perfect!
5. Be prepared to get help with debt!
Debt can be a problem even when you are working in a full-time job. An unexpected change in circumstance can mean missed payments, which mean extra fees and interest, which leads to more missed payments, and so on and so on.
There is no shame in having money trouble, and being made redundant is completely out of your control. But regardless, you must act sooner rather than later before things spiral out of control.
If you have found yourself struggling to meet your financial commitments due to redundancy, or indeed for any other reason, then reach out to debt free life today. We have a number of inclusive and accessible debt solutions at our disposal which can help you turn a difficult financial situation around and take back control.
Call now on 0800 808 5124 to speak to us. Our on-hand advisers are committed to helping anyone who picks up the phone in any way that they can.