You’ve been made redundant. You walk out of HR back towards your desk, grabbing a box so you can slowly and sadly empty your drawers and tidy your desk of your mementos and photos. Maybe, as a small act of revenge, you’ll nick some pens or a box of paperclips.
It’s desperately sad to be made redundant. Some react by bursting into tears, some by shouting and swearing, and some by quiet resignation. Others are upbeat, thinking that perhaps this is the break they needed, and they’ll find another job soon. But how are your finances going to cope?
However you react, the few weeks’ worth of notice you’re forced to work (or worse, the quick security escort off the premises) is an ignominious and embarrassing end to your job, given the sheer effort you’ve put into the role. You think to yourself, “…And this is how they repay me”.
But dominating all your thoughts, the one question going around and around in your mind is this: “How am going I pay the bills?”
Reasons not to be cheerful
Yesterday the Office of National Statistics (ONS) released a new report entitled Reasons for Leaving Last Job 2011, and we’ve noted with concern that 43% (292,000) of those leaving their last job so far this year have done so because of redundancy. There’s a handy (if long) video explaining the statistics on their YouTube page.
Redundancy is a major factor in personal debt in the UK. Nearly 50% of our 2010 clients cited job loss or a pay cut as the main reason for falling into debt.
Sadly this isn’t surprising, just as it’s not a shock to find that unemployment has nearly doubled since the financial crash in 2008.
With the rising unemployment rate, problem debt is going to get worse, especially as a rising part of the redundancy figure comprises public sector workers (see the ONS video from 4 minutes 23 seconds in).
Redundancy – what to do first
If you’re one of the 292,000 redundancies noted by the ONS, or if you’ve just been made redundant this week or even today, then you’ve got to focus on ensuring that you can afford to continue your financial commitments.
Our four-point financial checklist of what you should do first when you’re made redundant:
- Redundancy pay: Check with your ex-employer whether you are entitled to redundancy pay
- Benefit entitlement: Check your benefits. You may be able to claim benefits such as Job Seekers Allowance, along with help with paying your rent and Council Tax. Your local Job Centre Plus will help you with a claim for benefits when you register yourself unemployed
- Government mortgage schemes: If you own your home, check whether you’re entitled to help from one of the government mortgage schemes
- Payment protection insurance (PPI): If you’ve paid for payment protection with any of your creditors, check if you’re eligible to claim on them so the insurance pays your normal monthly payment. It could also be a good time to check to see if PPI was mis-sold to you in the past
For more help, read our introduction to our downloadable redundancy guide, for lots of helpful tips to you afloat financially during an unstable time in you and your family’s lives. If you need help straight away, use our online debt help service Debt Remedy and find a debt solution in 20 minutes.
Being made redundant is one of the most difficult times your life. They might have made a mistake by getting rid of you but don’t compound the mistake by not focusing on your financial future.