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Redundancy- financial advice please

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Redundancy- financial advice please

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scoobylou_3scoobylou_3 Forumite
129 posts
Hubby has just been made redundant. :eek: Got just over £10k pay off and will be paid til end Dec [a relief] The question is, whats best to do with this money to make it last as long as possible? Options seem to be £3000 in an easy access ISA in his name [he hasnt got one as yet] and £3000 in my existing one or see if he can open one of the high interest current account as he would be able to pay £1000 a month in out of his redundancy at least for a while. Am concerned that without a job at present he would not be able to open one of these though. His current account pays very poor interest as he has never had much excess in there to worry about interest rates. I am pretty optomistic about his prospects of finding work fairly quickly although I expect he will have to take a drop in pay, maybe up to £100 a week. I work part time and earn approx £650 a month and we have a 10 month old daughter. Any advice on what benefits we may be entitled to would be a help too as we have been lucky so far and not needed to claim anything. Thanks in advance

Replies

  • mjk_2mjk_2 Forumite
    219 posts
    Don't know much about all this, but I saw you had no replies and wanted to help! There's a website caled entitledto.co.uk that helps work out what benefits they're entitled to. Not used it myself but seen it mentioned on here several times.

    Hopefully your husband won't be out of work for too long, but I'd be careful not to go too mad over Christmas just in case (especially with his pay off sitting in your bank accounts!). With a bit of luck he'll be in work soon and you'll be able to plan what to do with any money left.

    Good luck!
  • innovateinnovate
    16.2K posts
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    scoobylou,

    putting 2 x 3K into ISAs sounds a good idea. The rest can go into a high-interest instant access savings account.

    If you have a low interest paying current account, look into opening another one (you can keep the existing one). Some pay 4% interest, and have no minimum pay-in requirements.

    You can also get cash incentives or points when you open new accounts - e.g. RPOINTS give you points for opening Cahoot current and saving accounts.

    Check out Martin's articles on Savings & Investments, and Loans and Banking.

    Then go to the forums that specialise on these matters with any additional questions you have


    Edited: if you are concerned that you won't get a new current account, choose a bank where you plan to have both, a savings and a current account. Apply for the savings first (no checks made other than standard anti-money laundering ones), load it with money, then apply for the current. Should they turn you down for the current, negotiate with them on the grounds that you are a good customer of theirs already
  • mbamickmbamick Forumite
    291 posts
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    It isn't clear what your status is in respect of your home. If you have a mortgage, you may be able to make the lump "work harder" by reducing your mortgage, or prepaying to create a "mortgage holiday" whilst hubby finds work.

    Obviously depends on the interest rate payable on any mortgage, and those available from the cash-ISA option.

    If the mortgage isn't an issue, Premium Bonds offer another tax-shelter - because any winnings are exempt from income tax. The downside is that you forego guaranteed interest, in favour of the possibility of winning monthly cash prizes between £50 - £1,000,000.

    Wish hubby good luck from all of us.
    Mick
  • innovateinnovate
    16.2K posts
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    Very good point, Mick, I had completely forgotten about mortgage!! Agree, reducing any mortgage [if overpayments are possible] is more often than not the smartest thing to do with spare cash
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