Being made redundant with savings

_ASH_

Hi Guys & may I thank any bit of advice in advance

I'm 46 & am looking to be made redundant but im in the following predicament (I must apologise as I know there are people in a lot worse situations than me), but I'm in need of a bit of advice.

My boss has always been a bit craft with money & paid me an amount into the bank (PAYE) & the rest cash, so im assuming that I will only get the redundancy based on the PAYE amount (what's gone in the bank)?

I currently have a mortgage (owe approx 11k over the next 3 years at 1.5% fixed until 2024)

I have savings of £7600k & should get redundancy of about £4500

which gives me £12100. I was looking to take a bit of time off to basically get my head straight after 14 years of stress.

Do I pay my mortgage off or keep my savings & carry on paying my mortgage per month?

I have also been diagnosed with dupuytren's disease & arthritis in my hands which concerns me when it comes to getting a new job.

Would there be anything that I could claim?

I know I'm in a lot better situation than others but I welcome any advice.

Many thanks

penners324

By crafty you mean your boss is breaking the law and involved in tax evasion.

HillStreetBlues

_ASH_ said:

Do I pay my mortgage off or keep my savings & carry on paying my mortgage per month?

Depends on if you plan to claim income related benefits, if so then you can pay some of the mortgage off to bring you below the threshold of any deductions.
If not wait until the 1.5% runs out, as best in a savings account gaining more interest than you currently paying.

tightauldgit

Your redundancy should be based on your contracted earnings not whatever your employer is fiddling and declaring to HMRC. If he doesn't do that then you can report him to HMRC and he'll be on the hook for  all the backdated PAYE he should have paid but didn't. 

Are you entitled to contribution based benefits rather than income based benefits? If you aren't looking for the latter then put the money in savings and don't pay off the mortgage - you can easily get 3.5% these days on an instant access and probably 4.5% on a short term fixed rate account. Otherwise it probably makes sense to pay off the mortgage to get your savings under the threshold for income-based benefits.

Do bear in mind that you have to live for sometime though so be careful you don't leave yourself with no liquid assets if you need them. 

tunde10

tightauldgit said:

Are you entitled to contribution based benefits rather than income based benefits? If you aren't looking for the latter then put the money in savings and don't pay off the mortgage - you can easily get 3.5% these days on an instant access and probably 4.5% on a short term fixed rate account. Otherwise it probably makes sense to pay off the mortgage to get your savings under the threshold for income-based benefits.

Its currently 4.63% in an easy access account and just over 6% in a 1yr fix. So there is a massive gain to be had putting it in savings whilst having a mortgage rate at 1.5%.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Personally, i'd open a Barclays current account which they allows you to open a Rainy day Saver at 5.13% easy access. Max £5k. Then the rest in a fix or notice account.

Obviously if you're looking to claim benefits, then pay off some of mortgage to get below the £6k threshold for means tested benefits. 

tightauldgit

tunde10 said:

tightauldgit said:

Are you entitled to contribution based benefits rather than income based benefits? If you aren't looking for the latter then put the money in savings and don't pay off the mortgage - you can easily get 3.5% these days on an instant access and probably 4.5% on a short term fixed rate account. Otherwise it probably makes sense to pay off the mortgage to get your savings under the threshold for income-based benefits.

Its currently 4.63% in an easy access account and just over 6% in a 1yr fix. So there is a massive gain to be had putting it in savings whilst having a mortgage rate at 1.5%.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Personally, i'd open a Barclays current account which they allows you to open a Rainy day Saver at 5.13% easy access. Max £5k. Then the rest in a fix or notice account.

Obviously if you're looking to claim benefits, then pay off some of mortgage to get below the £6k threshold for means tested benefits. 

Yeah I forgot that they keep putting the rates up. I thought I had been doing quite well tieing up my money at just under 5%. Though when I said 'easily' get I was meaning more about walking into a high street bank. I know a lot of people don't always want to deal with some of the smaller entities or move their accounts around etc..