Redundency Financial Planning

garvok

Hi,
Have looked on a few pages of the site, but couldnt see anything similar to my situation.
I recently took up voluntry redundency / release from my currently employers.
Basically the package was way too good turn down. plus i had plans to leave anyway to persue a different career choice.

are there any sort of financial advisors or websites that you can recommend?
I have been given the best part of 2 years wages to leave. I am in my mid 20's, own my own house. I know its essentail to keep the mortage and council tax repayments up. I do however have a loan and credit card. The payout will cover all of what i owe but i dont want to sell myself short if i don't find a job in the first 6 months.
any sort of advice to give would be great, as i really don't know what the best thing to do is.

Thanks in advance

G

latecomer

check out this board - its all about redundancy so you will probably get better advice there:

http://forums.moneysavingexpert.com/forumdisplay.php?f=165

Edit: More info - When I was made redundant 4 years ago I initially worried about everything (its in my nature) but found myself a new and better job and started before the end of my redundancy period. Turned out to be the best thing that happened to me at that company

I did consider a change in career but as the job came along before I did anything else I stuck with it. IF you are serious about changing career then now is probably the best chance you'll get as any drop in salary (to be expected) can be countered using your redundancy money.

atush

My BFF was made redundant 8 months ago, and got rehired by the firm that took over her old firm and made her redundant. Sometimes new owners let go the wrong people and she was better at her job than the person they had doing her job.

If you have debt like loan/ccard, i'd pay those off. No point in paying interest on it. The mtg will depend on the rate, how long it takes you to get work, and if you might end up on means tested benefits.

calypso_rhapsody

Have you thought of using some of the payoff for some skills training to improve your future job prospects? Just a generic thought as i know nothing about what your job is or skills are!

Beckyy

People might be able to give you more specific advice if you are able to post your current outgoings/mortgage payments etc. and outstanding debts, and the amount you'll receive from your employer.

How long until you leave your current job?

garvok

i leave my current job end of december.. I'll be leaving with just over £35k ( only 5k of that taxable)
Already planned to re invest 4-5k of that in re training, which means i'll be pretty busy over the first few weeks of the year.
I know i should pay them all off, but the debts are around 10-12k which i am a little reluctant to pay in full for the time being until i find new employment, The companies i owe money too said they are happy to give me breathing space of 6-9months till i find myself back on my feet where no fee or charges will be put on, so going to take them up on that offer, once i get back to employment i'll clear them in one hit.
my outgoings minus disposable income is roughly £1k a month

magpiecottage

I think, if you get your old employer to pay for it instead of redundancy, you MAY be able to avoid the tax on the training.

However, be warned, these training companies have a record of going bust without delivering. If that is a concern it may be better to take the dosh, pay the tax, contract direct with the provider and put the cost (or at least part of it) onto your credit card with the provider (rather than somebody else) being paid.

That way you have protection under Section 75 of the Consumer Credit Act 1974.

If you pay tax on the redundancy payment it seems likely to be only at 20% so just over £1,000 and you will have £34,000.

Use £5,000 for training and £12,000 for clearing the debts and you will have £18,000 which, from what you say is a year's income (with no further tax or National Insurance to pay on it).

That seems a pretty good cushion.

atush

Do pay the debt anyway. AS having too much money would mean you would not get means tested jobseekers. And although the companies might give you a break on repayments, they will continue to charge interest. Dont' keep these loans going.

As above, one years salary should keep you going.