About to be made redundant – what shall I do?

fosswire

With respect to other people who are financially worse off, I’m seeking advice about my own situation…….
I will get a redundancy payout of £45K. Do I:
1) Pay off the equity release loan of £40K on my former wife’s house, which I used as deposit on my own home. Thereby safeguarding the house for my 2 young children (primary school age). This will leave £110K on my own house, which I will then probably lose.
2) Use the money to fund me for the next 12 months whilst I look for work. Problem with this is the chances of me getting another job at the same salary level of £45K are low, and the chances of getting another job close to home are virtually nil.
So if I do find another job, say around £20K, how will I be able to pay my current bills.
Or what if I don’t get another job.
What help (benefits?) will I get. I live with my girlfriend and her salary alone (£900pcm) does not cover the mortgage and bills.
Any suggestions would be appreciated.
Thanks.

fosswire

Any suggestions ?

Takeaway_Addict

why would you pay 40k of and only leave yourself 5k, that wouldn't last that long.

Surely, keep the money and get the job first before spending the redundancy money on paying the loan off is the sensible option?

fosswire

Thanks for the reply.
I'm not thinking straight at the moment as the threat of redundancy is new to me.
My brain is all over the place, hence me seeking help on this forum.

The idea of paying off the £40K loan against the former matrimonial home
was to ensure my children have some stability. Putting them first before myself.

The other options I'm thinking of is using the £45K to start my own business as I'm fed up with my current career in IT.

Things I am thinking of include becoming a driving instructor. I have the capital to buy a car and do the training. In the past I've taught other people, but not as a business.

You're signature says:
"Don't trust a forum for advice. Get proper paid advice. Any advice given should always be checked"

I'm hoping people on this forum will give me advice and ideas, so open to all ideas, then I can look into them more closer.

Thanks

Scorpio33

In my opinion, the purpose of redundancy money is to see you through until you get the next role. So use the £45k to live off until you find another role - and don't be tempted to take any role to bank the money, as that role would not last long if you did that, as you would only taking it for the income.

If you think that the only roles you would like would pay less than your current lifestyle, the only options are (a) take a higher paid role you won't like or (b) change your lifestyle. You say your new lower potential salary would not cover mortgage and bills, so then you should be looking to reducing your mortgage and bills - ie: move house or increase your income - ie: better job or renting a room or two out (if possible).

I am going through redundancy myself and whilst the situation is different to yours, we both face difficult decisions and have to accept that no outcome will be perfect - some sacrifices have to be made.

But I do standby what I said initially - the purpose of your redundacy is to cover you until you find a new role, nothing else.

Bigmoney2

fosswire wrote: »

With respect to other people who are financially worse off, I’m seeking advice about my own situation…….
I will get a redundancy payout of £45K. Do I:
1) Pay off the equity release loan of £40K on my former wife’s house, which I used as deposit on my own home. Thereby safeguarding the house for my 2 young children (primary school age). This will leave £110K on my own house, which I will then probably lose.
2) Use the money to fund me for the next 12 months whilst I look for work. Problem with this is the chances of me getting another job at the same salary level of £45K are low, and the chances of getting another job close to home are virtually nil.
So if I do find another job, say around £20K, how will I be able to pay my current bills.
Or what if I don’t get another job.
What help (benefits?) will I get. I live with my girlfriend and her salary alone (£900pcm) does not cover the mortgage and bills.
Any suggestions would be appreciated.
Thanks.

Firstly sign on for contribution based JSA, payablr for 6months.

You can claim Support for mortgage interest (smi) after 13 weeks (i think) to help with mortgage payments.

I don't know what else you may be able to claim but have a look at a benefits checker, as depending on your girlfriends hours and if you have children, child and working tax credits may be available. Also help with council tax may be available, I'm not sure on the income limits though.

If you use the redundancy to pay off debt, I think you are classed as still having it as the point of redundancy is to tide you over till you get another job.

If you are making CSA payments they may be reduced now your income is lower, you need to advise them of this.

So option 2) use the redundancy to live off till you secure employment.

Also do a statement of affairs to see if you can reduce your outgoings, e.g. give up Sky if you have it, change to cheaper utilities etc.

AlecEiffel

As above, you may be able to claim contribution based jsa for 6 months, after which it becomes means tested. At the means tested stage they may refuse you further jsa if you are seen to have used a lump sum to pay off a mortgage. The job centre told us this when they came into my company last year during a round if redundancies.