Redundancy questions

ridgeback

Hi,
This was posted in a different section but I have been advised to post this in this section for possible reply's.....

I have found out that I am being made redundant, this is from a job I am begining to hate!, so no problems there.
I have been with them a long time, so I am getting approx £28k in payments.
My questions are these......
1. Is there any way of making this money work so it can last me a while, I have been working very hard for 18 years and fancy a few months off, is there any way I can get an income of around £900 a month from this payment by having it in some sort of 'investment', so me being a lazy git for a few moonths does not put any kind of hole in it.
2.I have paid mortgage protection cover for about 8 years, to the same policy. I can no longer locate the policy documents, but, I want to know... will this pay up now that I am being made 'redundant', or does the fact that I am getting £28k make a difference (e.g. is it 'means ' tested). I know all policies are different, but what is the general rule.
3. Would having £28k mean I do not get Job Seekers Allowance, I will be looking for a job after a few weeks, so, will I be entitled to this, also , If I am on JSA does my council tax get paid.

I know that I am getting good pay off and should not have to worry about JSA or other matters, but I just want a few months off without putting a dent in my redundancy payment.
It is to be used to pay off a big chunk of my mortgage when I get my new job.

As a footnote, I do have an offset mortgage, so this will lower my motgage interest payments.

Many thanks for reading this.

urbanfrit

1. I'm not an expert on this but I know of no way you can earn £900/month from £28000 with no risk. A savings account will only pay about £90.
If you do find a way please let me know!

2. The policy should pay out as long as your redundancy is not voluntary.The redundancy payment will not affect this.

3. You are entitled to Contribution Based JSA for 6 months and after that it is means tested. If you have spent all your redundancy money after six months on,say a Porsche you won't get any more benefits.

HTH

Debt_Free_Chick

ridgeback wrote:

Hi,
This was posted in a different section but I have been advised to post this in this section for possible reply's.....

I have found out that I am being made redundant, this is from a job I am begining to hate!, so no problems there.
I have been with them a long time, so I am getting approx £28k in payments.
My questions are these......
1. Is there any way of making this money work so it can last me a while, I have been working very hard for 18 years and fancy a few months off, is there any way I can get an income of around £900 a month from this payment by having it in some sort of 'investment', so me being a lazy git for a few moonths does not put any kind of hole in it.

Highly unlikely. You would need to generate a return of 38% p.a. :eek:

The best you can get in a plain vanilla savings account is about 4.75% (OK, one or two paying a bit more than that, but that'll do as a "safe bet"). That would give you £1330 p.a. or £110 per month ... gross i.e. assumes you pay no tax for the year. If that's your only income for this tax year, then it would be paid gross (if you complete R85 tax form). But it's not your only income this year ... as you've been paid for April & May ...possibly June ... and does your payment include any Pay in Lieu Of Notice (PILON)?

2.I have paid mortgage protection cover for about 8 years, to the same policy. I can no longer locate the policy documents, but, I want to know... will this pay up now that I am being made 'redundant', or does the fact that I am getting £28k make a difference (e.g. is it 'means ' tested). I know all policies are different, but what is the general rule.

Many don't pay out for the first 3 or 6 months of being jobless. In addition, they would take account of the £28k as being equal to x months salary and probably won't start to pay until the "x months" runs out.

3. Would having £28k mean I do not get Job Seekers Allowance, I will be looking for a job after a few weeks, so, will I be entitled to this, also , If I am on JSA does my council tax get paid.

Not sure about JSA .. but again, they are likely to view your £28k as equivalent to x months pay.

I know that I am getting good pay off and should not have to worry about JSA or other matters, but I just want a few months off without putting a dent in my redundancy payment.

Sorry, but the words "cake, eat, can't, have, and, you" come into play You can certainly eat into the payment to fund some time off, but you can't keep the money and have time off and have the State pay for you to live the life of Riley for a few months

Also ... if you deliberately spent the money asap, then this won't affect your JSA and mortgage protection ... they will still assume that your redundancy money is equal to x months pay and won't pay out until "x" is up.

Look at your net pay for the past few months. This payment is equivalent to x months net pay. So that's how long this payment will last you (with no cut back in expenses) - you have that long to get another job.

Let's say you have the equivalent of 6 months pay. How long do you think it will take you to find another job? If three months, then take one month off and then start to apply for jobs. It will probably take another month (at least) or probably two for you to start a new job.

So, you will have used up half your money - but you'll still have half.

Of course, if you think it will take you 6 months to get another job, you should start applying straight away and also cut back your expenses so you make that £28k stretch as far as possible. Anything you cut back can simply be added back as a saving once you get another job.

Having been made redundant 5 times in the past 12 years, I've had (on average) 6 months pay and in each case managed to have three months off and bank the extra 3 months redundancy. Sadly, most of it went to paying off my debt - apart from the last two

Plan for the worst .. then anything less will be a bonus

Debt_Free_Chick

And another thing ... .look at your expenses carefully. Is there anything you could give up, painlessly, for the next few months. You might then need less than £900 a month - though that's a very modest budget (are you sure it's enough?). Our budget is about £1,000 a month ... excluding our mortgage (a whopping £2,300!!! :eek:!)

Make sure your budget is robust and look for non-essentials you can live without, for a few months