Redundancy Money Questions

OnlyFools

Hi - I am new here this is my first post so apologies if these queries are obvious!

I was made redundant a couple of weeks ago and have today received my redundancy payment.

As I have been employed for a long period of time, I am now starting to look for employment, but as this is something I have not needed to do for many years, I am approaching this with trepidation.

I have just over £16,000 in various accounts, and my redundancy payment was £19,000. I am therefore looking to use the redundancy to live on for the foreseeable, until I find alternate employment. Hopefully sooner rather than later!

However, in the meantime, I have the following queries:

1) As I am going to be living on this redundancy payment, should it remain in my current account? My current ISA does not have instant access. Should I open a new current account for this money and transfer some into my main current account on a monthly basis as a "salary" for my direct debits/bills etc?

2) I currently claim child benefit. Will this redundancy payment affect this in any way? I don't think my income for the year will be over £50k with the salary earned so far plus the redundancy, however if I am employed quickly, I guess my income could potentially go over this before next April.

3) Should I look at claiming contribution based JSA? I understand that with approx £16,000 savings plus the redundancy payment I won't be entitled to the income based JSA?

Apologies for the long post and thanks for reading. Any suggestions are appreciated.

Mrs_Soup

As you are going to be actively seeking work then yes I would claim contributions based JSA. It will at least help you pay any expenses for interviews etc.

How long do you think the redundancy payment will last to live on. If it's more than a couple of months surely it would be worth putting some of it it in your ISA and giving notice to take some out later- assuming your ISA has a better interest rate.
I would carry on claiming child benefit for now and see what happens re employment.
Good luck with the job search.

OnlyFools

Thanks Mrs Soup.

Yes my redundancy should be able to last me a few months, as well as statutory redundancy I received a few months PILON.

I will look into the JSA payments.

noelphobic

OnlyFools wrote: »

2) I currently claim child benefit. Will this redundancy payment affect this in any way? I don't think my income for the year will be over £50k with the salary earned so far plus the redundancy, however if I am employed quickly, I guess my income could potentially go over this before next April.

3) Should I look at claiming contribution based JSA? I understand that with approx £16,000 savings plus the redundancy payment I won't be entitled to the income based JSA?

Apologies for the long post and thanks for reading. Any suggestions are appreciated.

I don't know whether your redundancy payment would count as income for child benefit purposes. I wouldn't have thought so but I'm not sure.

If you claim contribution based JSA you will get NI credits which will go towards your pension, which could be important if you don't end up having enough contributions through work for a full state pension.

AlecEiffel

What I have done (redundant 6 wks ago) is put most of the money in a separate savings acct (not going to earn a lot of interest) that is instant access via my online banking, and I transfer a monthly 'salary' when I would have got paid. It helps me manage my money, see how much redundancy is left, and I don't have lots of money just sat in my current account (I'm safe with banking and where I use my card etc but its peace of mind too!).

OnlyFools

Thanks all for the great answers.

I was just thinking about the NI credits, so I will definitely go for the contributions based JSA.

I have an appointment with the bank soon so I will see what they are recommending, but thanks all for your input.

noelphobic

AlecEiffel wrote: »

What I have done (redundant 6 wks ago) is put most of the money in a separate savings acct (not going to earn a lot of interest) that is instant access via my online banking, and I transfer a monthly 'salary' when I would have got paid. It helps me manage my money, see how much redundancy is left, and I don't have lots of money just sat in my current account (I'm safe with banking and where I use my card etc but its peace of mind too!).

That does sound like a good way to budget. However, I keep a lot of my money in my Santander 123 account, as it pays better interest than any savings account I know of.

Left my job over a year ago and still living off my redundancy payment so have to get as much interest on it as I can!

OnlyFools

Do you not have to pay £500 a month into the Santander 123 account?