Being faced with redundancy can lead to feelings of apprehension and fear, and while there will be hurdles to overcome, it could in fact be a blessing in disguise.
We are living in uncertain times but that doesn’t mean your future is uncertain. Benjamin Franklin once said, “out of adversity comes opportunity”, and redundancy could be the push you needed to make the changes to your lifestyle, career, retirement or ambitions you have thought about but kept putting off.
You may worry about the challenge of regaining employment, or the changes you need to make to your budget or lifestyle.
In our experience, there are some key considerations to help process what is happening and make a smooth transition into your desired path.
Deciding on your next steep – a change of occupation, self-employment, career break or retirement – will help you focus. You can then look at what you need to do to achieve your goal. For example, will you need additional training? How much will this cost?
Take time to think about your next course of action and seek support before making any decisions.
In order to work out how to achieve your ambition, you need to know your budget. The first thing is to check what payment you will actually receive. Usually the first £30,000 of a redundancy payment is paid free of income tax, however, anything in excess may create an income tax liability.
You will need to look at your outflows and budget for the short-term. If there is a deficit you may wish to contact the Citizen’s Advice Bureau to seek advice on debt management or payment arrangements, or seek guidance on The Money Advice Service website.
If there is a surplus, there are various options available. Our clients ask about whether they should repay mortgages and debts, if they can contribute towards their pensions and how they can save money on tax.
Dealing with redundancy can be daunting. It is important to take advice from all sources, including personalised financial advice from a trusted adviser.
At Armstrong Watson, our quest is to help our clients achieve prosperity, a secure future and peace of mind. We have many years of experience advising and supporting clients in this situation. If you would like to discuss your options, please call me on 07860 846370 or email firstname.lastname@example.org.