My redundancy sitution.

InDenial

I am being made redundant at the end of October.
I will get £20,000 redundancy.
I have debts of about £12,000. and mortgage payments of £520 a month plus other household costs totalling approx £850 pcm

I'm not sure where I stand with benefits as I will have about £8,000 left once the debts are paid.

I'm dreading looking for a job, it's been 21 years since I was unemployed.
I'm not sure what kind of work I want to look for, whether to try and find similar work (which has been a contributing factor to a nasty little anxiety problem, which I'm currently having therapy for) or try something completely new, I just know I need to start earning money FAST.
I was earning £23,000 pa, but once the debts are paid off, I could look for something that pays less. Hopefully something less stressful.

So that's sort of my plan:
Pay the debts off, see if I can claim any benefits, look for a new job.

Now the questions:
Should I pay the debts off first?
Do I tell my mortgage company I'm being made redundant?
Should I be doing something I haven't considered here?


I'm hibernating right now, hence the nickname, but time's running out and I've got to face things.
My biggest anxiety is losing everything, and I'm so scared of doing things wrong that I end up doing nothing.

Any advice?
Apologies if this is in the wrong place.

dawyldthing

if you need money fast agency work may be good as some will set you on and you'll work not long after which will give you breathing time for filling in job applications which are long

greenbee

Once you've paid the debts off, you have £8k, which means you have money for 8 months. Having the debts paid off should help reduce your monthly outgoings, and there are lots of other ideas on these boards for how to live more cheaply that you could investigate. Some may work for you, others may not.

It used to be a rule of thumb that it took a month for every £10k of salary to find a job. Sadly that isn't true anymore, but maybe you could use a little time to work out your options. Treat it like a job and spend regular hours investigating alternatives. You need to think about the skills and experience you have and consider how they can be applied to different roles or sectors to the one you are in. Also see what retraining opportunities are available, and consider temp or agency work (Christmas is coming up, so there may be something seasonal available that is less stressful, even if it pays less, which would stop your savings running down so quickly).

I have been made redundant twice, and on both occasions it led to a career change and more interesting opportunities for me. You've got a good redundancy payment (sadly you'll probably never get another contract with such a good deal), so make the most of it. Do you get any kind of outplacement service or retraining grant?

Don't panic. See this as an opportunity to clear your debts and get away from a situation that is clearly stressful for you. Hopefully there is something new and exciting around the corner for you.

SarEl

But and i keep saying this - do not pay off debts without very giood advice to do so. Some benefits treat this as disposing of assets and refuse you benefits. It's too late after you have paid off debts to discover that you can't claim benefit if you need to because they treat you as still having the money! Do not rush in to disposing of money you may need.

InDenial

I don't get my redundancy payment until a month after I'm made redundant, so I'm hoping the (is it DSS? -I don't even know what they call it nowadays) will let me claim something.
I imagine they'll ask how much I will get, but will they not accept that I have outstanding debts that I need to pay off...?

pompeyrich

Wont you get your last months money on the day you leave and that should last you until the redundancy payment is made. Although the DSS/DWP or whtever they are called these days, may well recognise you have debts, my experience is that they would expect you to service the debts, as agreed, from the redundancy payment each month, rather than pay them off in one go.

InDenial

The amount of interest and charges I'm getting I can't see the logic in accruing more interest on my debts. They can only not pay me, and at least I'll be debt free. If you've had debts yourself, as I think you suggest, you'll know how demoralising and debilitating being in constant debt is.

I will get a final wage a few days before I leave.

I was advised to claim immediately, which is why I wondered, as I need my NI payments to continue. I'm not trying to scam the DWP, I just want to do what's best for me.

pleasedelete

You will get contributions based job seekers allowance £65 a week for 6 months. It doesn't matter how big your savings are or if you have paid off debt. You will get ni credits.

InDenial

Gosh, such conflicting advice already.
This is why I'm afraid to start trying to deal with stuff, because I'm bound to do the wrong thing.

caledonian_princess

You can claim contributions based JSA immediately and as has already been said that is £65/week for 6 months; contributions based JSA disregards any savings. After that you can claim income based JSA and then your savings will be assessed as part of your claim. As Sar El says, it's best to check that paying your debts will not affect your right to claim income based JSA if you think it's likely that you'll be unemployed for more than six months. This is the CAB's leaflet (http://www.adviceguide.org.uk/index/e_selfhelp_redundancy.pdf) which should help.

InDenial

Hello, thought I'd let you know what happened to me.

7 days before my redeployment period ended, I was contacted by the HR Dept and told there were 2 jobs to which I was matched.
I am now 1 week into a 4 week trial for a job I don't want, that will probably make me ill with stress, but hey, it's a job. (And I probably AM competent enough to do it...)

In the balance of things, yes, I am relieved not to have to face a job search.
The money would have been good, I'd love to be debt free, now I just have to find ways to clear my debts, yet still live a life.

Thanks for your advice.