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I’m in debt and facing redundancy. What do I do next?
In recent months, we’ve seen redundancy announcements from Shop Direct, Debenhams, New Look, Homebase, Toys R Us and the ‘big four’ supermarkets – Tesco, Asda, Morrisons and Sainsbury’s, to name a few. The impact of Britain’s declining high street could see thousands of jobs and families affected.
For most people, the thought of redundancy and managing on a reduced income is a worrying one. But, if you’re already having money troubles and now you’re facing redundancy, you might see your self-esteem drop, feel isolated or struggle to keep a positive attitude.
We know it’s easy to say, but redundancy isn’t your fault, and you’re not alone. What should you do if you’re in debt and facing redundancy?
Know your redundancy rights
As you go through the process it’s really important you understand your rights and what your options are.
Your employer will have a process they have to follow, which covers things like selecting employees for redundancy, organising the required notice period and redundancy package entitlements.
Depending on your situation, your employer might offer voluntary redundancy, retraining, or another position in the company. Voluntary redundancy is where they’ll ask you to agree to end your contract and offer you a redundancy package, which could include extra pay or a reduced notice period.
There’s no need to panic or rush into deciding what you’re going to do though. You’ve got time to think this decision through.
We’ve put together a complete redundancy guide covering your rights, as well as ways you might be able to support your income, and other organisations who may be able to help.
Get a clear picture of your finances
Having a clear picture of your financial situation will help you plan a budget that works while you’re finding another job or income.
You can use our simple budgeting form, already set up to work everything out for you. All you need to do is fill in the details for each section, and it’ll work out your monthly income and outgoings.
If you’re relying on credit to top up your income, chances are your budget will show you have more money going out than you have coming in.
Find smart ways to reduce your spending
If you’ve already been trying to balance your budget yourself by reducing your spending and increasing your income, that’s great. Here are a few more options you might not have considered.
One of the first areas you could look at reducing is non-essential spending, even if it’s just for the short-term. Non-essential items could be clothing, footwear, hairdressing or leisure and hobby items.
You could also look into cancelling or downgrading monthly subscriptions if you think you can live without them for a few months, like:
- satellite TV packages
- streaming services
- broadband and phone packages, or
- mobile phone contracts.
Rory recently wrote a post with some excellent tips on how to save money on TV packages, including how to haggle with your provider, and how to switch to free services.
Even if you’re managing on a reduced income, you should never go without food and other essential items. But there might still be savings to be made on your grocery shopping. You could consider switching your shop to a cheaper supermarket, or buying an own-label brand instead? Find out seven more ways to save on your food budget.
Look at how you could increase your income too
A good place to start is checking what benefits you’re entitled to, using a quick and easy free benefits checker. As soon as your employment ends, you’ll be able to put a claim in for Jobseekers Allowance (JSA).
You could also sell any unwanted items you have lying around the house and have a de-clutter at the same time. Lots of stores and websites will pay for your old mobile phones, laptops and tablets, CDs, DVDs and games.
Or you could look at sites like eBay or Schpock where you can sell pretty much anything, from clothes to furniture to recycling!
Give your CV a little TLC
Before you start applying for new positions, look over your CV and spend a bit of time re-writing it to make sure it represents you now. Include all your most recent experience and achievements, and think about making a few different versions to suit the different types of job you might apply for.
If it’s been a while since you’ve needed to update your CV, or you’d like a second opinion, there are free career advice services and companies online that’ll review your CV for free.
You can also make use of our tips on improving your chances of landing a fantastic job – from creating a killer CV, to acing your interview technique. After all, first impressions count!
Get in touch with us
If you’re worried about falling behind with your debts, use our online debt advice tool. It takes around 20 minutes and provides advice tailored to your situation as well as a recommended debt solution.
Or if you’d prefer to call our helpline and speak to one of our expert advisors, they’ll be able to talk to you in detail about your situation. This way, you can focus more on staying positive and looking for a new job.