thinking of taking redundancy, what benefits can i get

MissMoneypenny

jennmark wrote: »

ok some further clarification, i am not thinking, 'lets give up work and claim benefits instead', i am investigating if it would be possible for us to get by without my wage and wondered if anyone knew what benefits we would be entitled to with two children and a household income of around £23000 before tax.

There are quite a few posts on here recently from people who chose to have another baby or give up up work, by looking how much welfare they could claim. Welfare rules change and the welfare cuts have now left them having to really scrimp by.

jennmark wrote: »

the debts are loans and a credit card, they were accumulated by my husband a while back, and we have been steadily paying them off for the last three years, however this is a much quicker way to clear the debt and save some of the interest.

Look at getting some interest free credit cards and pay down the amount while it is 0% interest. If you go to the Debt-free wannabe board, they will be able to help you with some good advice

jennmark

thanks BigAunty for your considered reply.
the redundancy pay out will be just under £16,500, in addition i would get £5655 in a lump sum for the SMP i would be entitled to, also i would be paid for unused a/l which would probably be another £500 or thereabouts.
we pay out £500 a month in debt repayments at the moment, nursery and afterschool care will be at least £350 a month, i only bring home £1000, if i go back to work it will be tight anyway.
i know we overspend on our groceries, mostly because the days i work we get home late so tend to eat convenience foods more, i know when i was on mat leave last time i slashed our grocery bills as i had the time to shop around and the time to prepare cheaper food. i think we can make it work but the ctc would be a cushion to fall back on, its a big decision to make i've had a job in one form or another since i was 14, i spent 4 years at university, i never saw myself as a sahm, but right now it looks like it could be the best move for my family.
i'd just been hoping for a bit of objective advice.

MissMoneypenny

You would definately get a lot of help with cutting your debts and changing services, on the debt free wannabe board. It's quite amazing to see how some pay off huge debts in excess of 50k!

Have a look at the Old Style board for advice on batch cooking and cheap healthy meals. I work too, so I do batch cooking on a Sunday and that lasts us all week. All I need to do then, is cook the veggies. With summer coming, it is even easier, as it's salad.

carebear13

they are some serious debts to be paying back. will you be able to afford them if you are on smp? part of me says go for it, cos of the repayments you are making, however if they have been run up by your hubby for no good reason shall we say, then are you sure it's the right thing to do? could you just pay off half and keep some back in the bank to make things more managable? it may be that these arent the only redundancies that are made, so perhaps wait and see and then you at least have the option of still having a job.
its a difficult decision to make, but sometimes these things happen for a reason, i remember my hubby being made redundant once and getting a big payout and it turned out to be a good thing. good luck with what you decide.

jennmark

carebear13 wrote: »

they are some serious debts to be paying back.

youre telling me! they feel like a millstone around our necks, they are mainly from youthful ignorance and a poor grasp on finances, mine is however much firmer and if we take this step then i would be wholeheartedly in charge of all family finances, at the moment after paying a portion of his wages into our bills account, he manages the rest of his money, which currently includes paying the debts back (other than student loans company loan i have no debts)

carebear13 wrote: »

could you just pay off half and keep some back in the bank to make things more managable?

that is an idea that i hadnt considered, i dont know if we could make the repayments though without my wage on even half of the debt, will do some investigating.

carebear13 wrote: »

it may be that these arent the only redundancies that are made, so perhaps wait and see and then you at least have the option of still having a job.

this is the third round of voluntary severence we have had through, if the books arent balanced then voluntary redundancy will be offered to people deemed 'at risk of redundancy' as it stands though no one can tell me if i am likely to fall into that category.
this is one of the many things that make it so hard to decide, if i stay put i may still end up out of work, or i could go now and at least that uncertainty is taken away. if i dont take this and dont get offered voluntary redundancy then we will be in the same postion we are now but with more childcare costs, i was aware of this when we decided to have another child and knew it would be hard work, this way looks no easier financially but just sounds like a better deal for the whole family and in particular the children.
thanks for your advice, i do still have some time, i put my request for consideration in but it will be a month or so before i have to sign any compromise agreements and i can pull out at any point up until then, we have a lot of thinking and a lot of maths to do!

xylophone

I can well understand why you would want to pay off the credit card debts. I can also see why you think it would be best for your coming child for you to be at home while he is a pre schooler.

Would you have enough redundancy to have a cash cushion in hand for emergencies? Would you be disciplined enough never to allow debt to build up again?
If you budget carefully, take the best available deals for power, insurance etc, could you live for five years on your husband's salary?
Incidentally, the personal tax allowance is going up after the budget which helps a little.

Have you thought about child minding if you stay at home for a few years?

jennmark

childminding doesnt really appeal, i have considered it before but i dont think its me, there are other things i may be able to make a few bob from though just to give us a bit of a slush fund.
originally i thought we would have to use all of the redundancy to clear the debts but have since discovered that i would get my smp and unused a/l as a lump sum on leaving which would give us a cushion of about £5000, more than we've ever had in savings before.
i hate that we are in debt and as previously stated have no debts of my own other than a student loans company loan, his debts were accrued years ago and have not since been added to, so though we are in debt its not spiraling debt and we are chipping away at it but have 4 years left to go, i am confident that if his salary will cover the bills then there will be no building of debt, the credit cards are already under lock and key.
i also havent factored in overtime available to him as i think it is unwise to rely on overtime to pay the bills so was planning to stash all his overtime money in another savings account which would cover the treats and bolster the cushion.
we have some serious thinking to do, thanks to everyone who has provided constructive and non-judgemental comments, it has been helpful and insightful.

carebear13

one other thing to think of is that it's obviously going to cost more in credit card debt interest than its ever going to earn in the bank, and at 500 quid for the next 4 years, that is a lot of money.
would having an extra £500 each month in your pocket help you more? and yes i know that you will be losing a wage, but you also wont be paying childcare either. so thats only £150 a month less than when working, take a look at the tax credits calculator on mumsnet, its been updated with all the changes for next year and compares with what you get up to this april. sorry if this is all abit garbled, had a baby just a few days ago and it is way past my bedtime.

jennmark

carebear13 wrote: »

one other thing to think of is that it's obviously going to cost more in credit card debt interest than its ever going to earn in the bank, and at 500 quid for the next 4 years, that is a lot of money.
would having an extra £500 each month in your pocket help you more? and yes i know that you will be losing a wage, but you also wont be paying childcare either. so thats only £150 a month less than when working, take a look at the tax credits calculator on mumsnet, its been updated with all the changes for next year and compares with what you get up to this april. sorry if this is all abit garbled, had a baby just a few days ago and it is way past my bedtime.

see this was exactly my thinking, if we add in my travel costs to work pretty much all of my wages are being used to pay the debts and enable me to go to work, if we didnt have the debts then i wouldnt need to go to work, its just a bit daunting to relinquish my salary which is around 12000 a year after tax, and be solely reliant on my husbands wage, its not a position we've ever been in before.
i will definately check out the mumsnet calc, thanks for the tip, that is the kind of thing ive been looking for to give me an idea of what we would be entitled to next year.
many thanks for the help and congrats on the baby!

Anubis_2

Would the family not be entitled to WTC? I have seen posts on here of couples with two children earning over 23k who are entitled to WTC?