What payments (if any) to cut after redundancy

m0rgana

I've just been made redundant and am not completely pessimistic about finding work quite quickly (yet) although I suspect it will not be at my current salary unfortunately. I am just wondering what other people in my situation would advise in terms of regular payments that have the option of being 'skipped': is it advisable to cancel all you can until further notice when receiving this news or should I continue to make them as normal?

I am thinking about things that I set up after considering my usual salary, e.g. my pension payments (I have never had an employer contribute to this so it just comes directly out of my bank account and is controlled by me). I am also unsure whether or not to inform the student loans company now that my income is not going to be the same as it was with immediate effect. I am actually reluctant to stop paying them because I am so terrified that they are going to put their interest rates up at some point - I just want that debt paid, and quickly. But after my redundancy pay runs out (just before xmas, conveniently) I will be paying them through my savings, and because I did a lot of studying, this actually amounts to my second biggest monthly expenditure after mortgage.

So...What did you do if you were made redundant while having to pay for your education and retirement simultaneously, as I am? I appreciate that this is a personal decision, but am interested in how others have approached it. Did you continue to make all your regular payments as normal or cut out as many expenses as possible immediately on hearing the news? Do you think it has an impact on your general degree of optimism about finding work? I know that I will not seek any form of jobseekers' allowance unless absolutely desperate, mainly because I think it would put me in the mindset of being stuck without work, and I wonder if this is a similar thing. It's probably clear from my tone that I'm still in a degree of shock after receiving this news, and may need some sense talked into me on matters like this.

Edit to add: I have been given roughly 3 months redundancy pay so have a bit of time to figure this all out.

Linda32

When I was made redundant I cut out everything that was not essential. With regards to pension payments I made the lowest possible payment to still keep it open which was £10 a month.

We pay out insurance for drain/pipework cover etc. This would stop and we would take the risk.

Any gym membership or TV packages would go as well.

I've never had a student loan so I've no idea how that works.

Thinking about my situation should either of us be made redundant. The mortgage would have to be paid and my OH has insurance for a year to cover that. When I was made redundant I had insurance as well. You have to continue to make these payments.

Council tax you could ask them to divide what you still owe for the year over 12 months rather than 10 if you don't already pay that way.

Gas and electric is essential, but if your not tied in and you pay monthly you could see if there is a cheaper rate.

Water would have to stay as it is.

TV Licence you can't alter.

Think about every penny you spend and ask yourself "do you need it or do you just want it"

Make sure you sign on. It will pay your NI Credits towards your state pension.

HTH and best of luck.

Serendipitious

Claiming JobSeekers Allowance could give you a little bit of income, as well as entitling you to other help. Their emphasis will be on you finding work and making applications which can be a useful spur. Also you will get your National Insurance contributions paid to save you having a gap in those later on.

Even if you took a lower paid job it would help eke out the redundancy pay and the student loan repayments would (I think) be adjusted in line with your new lower income but I am not sure of that so best check it out.

With Christmas coming, now could be a good time to get some seasonal temporary work which might lead on to better things.

I would say earn what you can and keep what capital you can. It's easier to go from a job to another job than it is to account for gaps.

getmore4less

you cut back the day you know income is compromised cash preservation is essential.

learn to live on the lower outgoing even if you regain income.

never commit to contracts you can't cover from savings.

mortgate/rent are special exceptions.

m0rgana

Thanks everyone. Student Loan is possibly the biggest headache here because of the type of loan I have (one of the earlier ones) which seemingly won't allow alterations to the amount paid back each month. I think I have to apply to 'defer' and prove I am not currently earning, but I still don't really want to do this in case they do decide to hike the interest rate later on.

Not going to sign on though, I don't know how anyone can put themselves through that the way jobseekers are treated nowadays (and yes, I do know that this is 'what they want').

Linda32

m0rgana wrote: »

Not going to sign on though, I don't know how anyone can put themselves through that the way jobseekers are treated nowadays (and yes, I do know that this is 'what they want').

Why on earth not your entitled to the money. If you have been working for the last two tax years and I assume you have. Your NI Contributions which have been deducted from your pay, go in part to the first six months of Job Seekers Allowance.

You have nothing to worry about as long as you seek a job whilst claiming job seekers allowance

m0rgana

Linda32 wrote: »

Why on earth not your entitled to the money. If you have been working for the last two tax years and I assume you have. Your NI Contributions which have been deducted from your pay, go in part to the first six months of Job Seekers Allowance.

You have nothing to worry about as long as you seek a job whilst claiming job seekers allowance

Honestly? I couldn't handle the humiliation. Plus not allowing myself that safety net will probably force me to find work quicker. Better to bring this on myself than to become dependent on it only to be told the same thing by some ghastly person in a job centre when I fail to do so in however long it is they leave it before you become slave labour.

liney

m0rgana wrote: »

Thanks everyone. Student Loan is possibly the biggest headache here because of the type of loan I have (one of the earlier ones) which seemingly won't allow alterations to the amount paid back each month. I think I have to apply to 'defer' and prove I am not currently earning, but I still don't really want to do this in case they do decide to hike the interest rate later on.

Not going to sign on though, I don't know how anyone can put themselves through that the way jobseekers are treated nowadays (and yes, I do know that this is 'what they want').

I thought that Student Loan payments are taken directly from your salary, so as soon as you stop earning, then they will stop being taken until you begin earning the required amount again.

m0rgana

liney wrote: »

I thought that Student Loan payments are taken directly from your salary, so as soon as you stop earning, then they will stop being taken until you begin earning the required amount again.

You thought wrongly.

liney

Well the information I have indicates that payments are made through the PAYE system or Self Assessment and are linked to income, currently £21k previously £15k. Therefore if you are unemployed you do not pay.

Unless you are talking about a career development loan which is not a Student Finance, but a loan from the bank to pay for professional qualifications.

m0rgana

liney wrote: »

Well the information I have indicates that payments are made through the PAYE system or Self Assessment and are linked to income, currently £21k previously £15k. Therefore if you are unemployed you do not pay.

Mine (Student Loans Company, pre-2000) comes directly out of my bank account. I will ring them up regardless, and see what they say...