Click to Chat

Live chat with our customer service team.

InsureWithMax Blog


You’re dismissed from work: made redundant

Last week the news channels were showing employees walking from UK buildings, clutching boxes. This means that they were dismissed, most likely due to non-renewing a fixed-term contract or being made redundant. In my 30-year career, I have been made redundant twice, each time I was in a steady job and then shown the door by my employer. If you have been made redundant, how did you cope?

redundancy

The circle of work

To qualify for statutory redundancy, an employee must have 2-years’ service. If you are aged 22-41, then you are entitled one week’s pay per year worked. If you are over the age of 41, you are entitled to one and a half week’s pay. Depending on your company’s policy on redundancy, you may be entitled to more. The first £30,000 of redundancy paid by an employer is tax-free, but pay in lieu, holiday pay, outstanding bonuses, commission are taxed in the normal way.

There are no easy answers, just clear actions

  • Aim to have savings equal to 3-months’ take-home pay in an instant access account, to cover the household bills, should a redundancy appear.
  • Calculate your monthly outgoings and the size of the redundancy package, to see how long your monies will stretch.
  • Check your direct debits, working out what could be cancelled or moved to a cheaper deal.
  • Investigate and claim all the benefits you are entitled to. Few realise that redundancy entitles you to claim Jobseeker’s Allowance (JSA) without being means-tested for those who have paid enough National Insurance contributions. It ensures NI credits are made towards the state pension for each week JSA is claimed.
  • Don’t shy away from debts. Charities provide free and independent debt advice. They can help you to prioritise payments and remove the pressure from the different lenders.
  • Many people made redundant become self-employment or set up a business. Government grants are available, from reduced costs and free equipment, to cash awards to help your new business grow.
  • Check for a charitable grant. The charity Turn2Us is over 100 years old and has given £3m direct grants to 3,000 people in 2016. 

Step back after being made redundant and don’t panic. The next step should be forward, as you have many valuable skills to offer a new employer. It’s interesting to note that over £15bn of benefits went unclaimed in 2016, by those who have been made redundant. Don’t be afraid to bounce back; I've proved that you can bounce back after two redundancies.

ChildMax insurance pays your take home salary while you’re on 12 months’ unpaid leave caring for a sick child. It starts from £49.50 single payment. Once your claim is agreed, within 30 days we’ll ensure up to 12 monthly tax-free payments in arrears, enabling you to stay at home care for your sick child.

Visit at www.insurewithmax.com or call the UK call centre 0333 323 0098 for more information.

Sources:

https://www.ft.com/content/6568790c-4529-11e7-8d27-59b4dd6296b8

https://www.startuploans.co.uk/business-advice/get-small-business-government-grant/

https://www.bbc.co.uk/news/business-48926522

 

Date: 15 July 2019 by Max Robinson