voluntary redundancy decision...help???

vegas_vicky

Hi all,

By the 7th Sept my husband has to decide whether to put his name down for voluntary redundancy. I can see both sides of this and would appreciate other peoples views.

The situation is this:-

We own our home.
We have no debts.
We are a family of 3, 2x adults, 1x 4 year

I have completed Martin's budget planner and worked out we can live off £20,000 a year. If needs be we could cut this down alot more, but this is me being optimistic.

If he takes redundancy:-
He will get close to £50,000.
We could live off that for a couple of years.
He would need to find another job (his experience is with the same firm since leaving school in IT)
I have also retrained and once our daughter is at school full time will be looking for a job in a school or playgroup (I am already a supply teaching assistant at her school). This will allow me to look after our daughter in the school holidays as we have no family close by.
My only worry with this scenario is that we both won't be able to find jobs and slowly will spend all our money, start using the house to get money and get into debt and lose everything, I realise I am being dramatic, but these things can happen.

If he stays in the job:-
He is guaranteed his good wage and overtime.
He could get outsourced, which has happened to most of the IT in this company, and the outsource firm have put a proposal to take my husbands team too.
If he is outsourced they can change his redundancy, pension, working conditions, etc. He has talked to other people who have been outsourced and they have lost all their benefits, working conditions are hard and they feel they are being treated badly to force them out.

SO on one side he gets a lot of cash and the chance for a new start, but very scary!
on the other side he stays in a job where he most likely will get outsourced and could lose his benefits, but at least he will have a job!

We have talked about this every spare minute we have, talked to family and would welcome anyones advise, questions, help on making this decision.

Thankyou.

mikee31

Hi vegas_vicky,

I am unable to give you any advice on this, but am currently having the same dilemma (i.e. up for redundancy and debating whether to take voluntary or not), albeit with different circumstances as it would appear that you are both in a relatively good position in terms of payout, existing debt and job prospects.

Personally, it would seem that I am in a far worse position to be made redundant or take redundancy (given outgoings, debt, young family to support, partner only working part-time at present, etc) but see an opportunity to possibly change my career path, as the industry I am in is in turmoil. In all honesty I don't really enjoy the job anymore and haven't done for some time, although this could just be because of the status of our company, and have just continued for years in order to pay the bills as I earn a decent wage and am not trained anything else. I am also finding it all a bit scary, but also see opportunities that perhaps I did not consider before as we all sometimes get stuck in a rut.

Therefore, it may be a question of whether your husband is happy where he is, happy with the career he is in or whether he would ideally work elsewhere or do something completely different?

Sorry to hijack your post, but its interesting to know that others are also having a similar dilemma. I wish you well whatever you decide.

Rockporkchop

I would be tempted to take the £50k and make a new start.

You say that if he stays in the same job he will be guaranteed his good wage and overtime - but will he? If they are already making redundancies, the next thing to go could be the overtime and then the benefits, which happened to my DH. If he is outsourced it will be just like starting a new job from scratch anyway but without the £50k nest egg. It will probably be good for him to do something different anyway.

If you invest the £50k wisely you should be able to earn a fair bit from that. The minute your DH leaves his job he will be entitled to contribution based JSA which is about £64 a week (or he might be entitled to couples allowance of just over £100 a week depending on your circumstances). That's quite a lot towards your outgoings without even dipping into the lump sum.

My DH was offered voluntary redundancy just over a year ago but said no because of the security and the good wage etc. Then the company went down the pan just a few months later and he got the statutory amount - £3500 for ten years' service. I'm not bitter (much!).

Best of luck.

Grovester_2

Taking VR also measn you are entitled to all the same benfits as normal redundancy.

bendix

If it was offered to me, I'd bite their hands off. £50,000, of which £30,000 is tax free? Take it, take it, take it, particularly given his outlook if he stays in the role aren't that bright.

I'd then have a break for six months to smell the roses, and before you know it, there will be jobs a plenty for him.

Grovester_2

i'd say have a break too, but, it's a physcological thing. You can't always relax and have a proper break until you know when you are next being paid. I had enough to cover me for a bout 6 months and even then we could off the OH wages, but I couln't relax most of the time.

Untill you are in the position you can't say how it may affect you. But 50k is a decent wedge, providing a new job is easy enough to come by, took me about 10 weeks.

A apoint of note, it's not just there's less jobs, there's more competition so wages have dropped from what I can tell so the new job may be paying less.

vegas_vicky

Thankyou everyone for all your kinds words. I realise we are in a good position and alot better than most and to all those people I wish them luck in their decisions and outcomes and hope it all works out for them. From all people are saying I think we are leaning towards taking the redundancy, but DH could change his mind tomorrow, he seems to every day!

getmore4less

What chance has he got of getting the redundancy payments written into his contract so if outsourced/TUPEd he has the choice to leave or take the terms with him.

Anothe year and things could be differnt employment wise and another years service all help with the future payouts.


I would have another lookat your budget and see where you can cut back to make the money go even further.

happywarmgun

I'm in a similar situation.

Couple of things - you say you will get 50k. Have you factored in Tax on this in your calculations? 20k of the 50k will be taxed at his normal tax rate - depending on income it may also push you into the higher tax band for this year only so some of it may be taxed at 40%. Just make sure you clear on this when doing your sums.

As to should he take it or not.... this is crystal ball stuff. There are lots of unknowns. Clearly staying put in a familiar environment feels 'less risky'. But as you acknowledge yourself it is not risk free... chance of further redundancies down the line, outsourcing etc.

Taking a jump feels 'risky'. Though it sounds like you already have a good handle on managing those risks from a financial point of view. It may in fact be no less risky than staying put though - the reality is that the IT market is picking up. Chances are that you would take the money have a few months at home and then land a job every bit as good as the current one - but you will have had a chunk of the mortgage paid off courtesy of the VR and your husband will benefit from a change. I personally think that it doesn't do any of us good as people to be stuck with one employer too long - change means you learn new skills, meet new people and both those things make life richer. But I agree it makes it more scary.

There are risks either way - but I suspect the 'staying put' option is actually more risky than perhaps you have factored.

Horses for courses though - your husband knows himself and what he wants from life best - so he has to make his own decision.

Good luck!

vegas_vicky

To answer your questions - there is no chance of getting the redundancy payments written into his contract. The same firm who have already outsourced some of the staff have already reduced their redundancy to the statutory amount!

As for the £50,000, this is after tax, yes I know we are really lucky, but he has worked there 21 years and joined the Monday after leaving school on the Friday, so yes I think a change is needed.

jonesy68_2

I have been made redundant twice in the last ten years, and after the second time I decided I wouldn't go for my hat trick and used my redundancy money (what there was of it!) to set myself up on a self employed basis. I have to say it's the best thing I did and I don't regret it for one second.
Redundancies can be pretty scary but at the same time, they give you opportunities to open a lot of other doors that you may not have done if you carried on plodding in a job.
I guess I cant advise you to choose one way or another but all I want to get across is sometimes, it can be the best thing that happens to you!