Redundancy News - Weighing up my options would help with some feedback

20vt-rs

Hi all,

I've received the unfortunate news recently that I will be made redundant in the next few weeks, I'm still processing it all and deciding what the best path is for me, I'll give some background, but would really appreciate some feedback and thoughts from others with a view, who may have been in a similar situation etc.

I have been working in the IT industry for over 30 years with approx. 15 to go before I retire, and have just clocked 29 with my current employer. Having this news is a first for me, and haven't applied for jobs for a very long time! There is a lot to think about, not just what to do next, but also things to wrap up at current employer, redundancy package thoughts, tax, pension etc etc. my head is blown!

Current role has gradually become pretty boring but easily doable, I work remote and don't have much interaction with people unless over a 30-min zoom each day. However, I balance this with the ability to be at home, see the family, head out early to do school runs etc. But I have not had job satisfaction for a long time, not like I used to being out meeting people etc. Pay has been good as well as the benefits. I took the down sides and balanced with the work-life balance and pay etc.

I have been offered a pretty decent package to exit the company, and if I am frugal I could last 18-24 months before needing a new role (although I don't intend on doing this). I will probably look to take the tax free element of this, and put as much as possible into the pension to avoid paying too much tax, unfortunately the pay in lieu of notice (3-months) will have to be taken, and will take me into the 40% tax bracket (Would I be wise to take financial advice on this or just take the hit? I don't think there is a way around it!).

Job and career wise, I have been offered another role internally which I think I could do, but it's not really my choice and I don't feel that excited about it. Additionally, I feel like my length of service even though a good thing sometimes can also become a bit of a ball and chain, and previously I have avoided leaving to preserve this.

My thoughts currently are to take the package to exit the company, use this as a fresh start, do something else maybe, not even in IT that I would find enjoyable. If I don't like it, then I can make a change, keep the redundancy package as the buffer to allow this to happen. I would really like to enjoy the last 15 years of employment, and couldn't really see me doing this for the next 10-15 being honest.

In the meantime, I am working on my CV, researching jobs and trying to decide what to do next! 

Sorry for the long read, but it would help to get it down and see if anyone has some thoughts or suggestions / advice on this.

Many thanks all!

saajan_12

Sorry to hear that, it must be a shock. However since you say you weren't really enjoying it, this might be a blessing in disguise to give you the push you needed to make a change. 

Just on the money part:

20vt-rs said:

I will probably look to take the tax free element of this, and put as much as possible into the pension to avoid paying too much tax, unfortunately the pay in lieu of notice (3-months) will have to be taken, and will take me into the 40% tax bracket (Would I be wise to take financial advice on this or just take the hit? I don't think there is a way around it!).

!

On this part, why is the PILON changing your tax band? If you're made redundant in a few weeks say mid Jan, and then get paid for 3 months notice pay, the total income this year is the same as it would have been in 12 months. You may get a bit of noise from 3 months worth coming in one payslip and then nothing for Feb/Mar, but as income tax is annual, it should work itself out to the same as usual. National insurance is monthly so that may be a bit different, but thats smaller. 

So it should just be the redundancy package less the 30k tax free that changes your total income, but you can see if you can pension that or something. 

Brie

I always looked at redundancy as an opportunity for change.  And 29 years with a company should mean a good payout even if some of it goes at a higher tax rate.  Take advantage of any advice the company provides for free - ask about tax/pension advice as well as job hunting skills. 

As noted already £30k of the money is tax free and then you'll want to dump a load into a pension or other "tax avoidance" to minimise what you pay HMRC.  You might want to ask a specific question about this on the pension board.  If you do link this posting to it so you don't duplicate too much.  

15 years to retirement - think about what you want to do - take another IT job?  work at the till of a supermarket?  work for a charity?  All good options that might allow you to continue with time at home.  To help make a decision I'd start by putting together a spreadsheet (if you don't have one already) showing all your pensions including the state pension as that will allow you to best consider how you can cover current expenses as well as future ones.  It helped me immensely at my last 2 redundancies at 59 and 64.

Markdavid1962

Hope all goes well, just a couple of points, as I also took a package 3 years ago and was also in IT like you

As you mentioned push money in to pension to avoid tax, especially if reducancy exceeds £30k as you are in IT they may ask you to sign an NDA, if they do they should pay you for this, when you have the offer on the table and having the conversation with HR ask if they have a discretionary pot, with my old employer you had a pot but had to ask and I got an extra few thousand.on top of what I was entitled to.

Besides the notice pay they should pay you for other benefits if you have them (medical, car allowance etc)

20vt-rs

saajan_12 said:

Sorry to hear that, it must be a shock. However since you say you weren't really enjoying it, this might be a blessing in disguise to give you the push you needed to make a change. 

Just on the money part:

20vt-rs said:

I will probably look to take the tax free element of this, and put as much as possible into the pension to avoid paying too much tax, unfortunately the pay in lieu of notice (3-months) will have to be taken, and will take me into the 40% tax bracket (Would I be wise to take financial advice on this or just take the hit? I don't think there is a way around it!).

!

On this part, why is the PILON changing your tax band? If you're made redundant in a few weeks say mid Jan, and then get paid for 3 months notice pay, the total income this year is the same as it would have been in 12 months. You may get a bit of noise from 3 months worth coming in one payslip and then nothing for Feb/Mar, but as income tax is annual, it should work itself out to the same as usual. National insurance is monthly so that may be a bit different, but thats smaller. 

So it should just be the redundancy package less the 30k tax free that changes your total income, but you can see if you can pension that or something. 

Thank you, and yes it was a shock but is sinking in now. That's a good point you note on the PILON, it should be near enough taking me to end of the tax year. I think in my calculations I assumed I'd also be paid to April   so that's a bad on my part, I think it might be just be ok then (as I am not far under 40%), but if I do end up getting a new job this tax year it might become an issue again. Will keep an eye on things...

Actually you prompted another question in my head, my company benefits stop in January now rather than April, so I will need to make sure my tax code is adjusted accordingly.

20vt-rs

Brie said:

I always looked at redundancy as an opportunity for change.  And 29 years with a company should mean a good payout even if some of it goes at a higher tax rate.  Take advantage of any advice the company provides for free - ask about tax/pension advice as well as job hunting skills. 

As noted already £30k of the money is tax free and then you'll want to dump a load into a pension or other "tax avoidance" to minimise what you pay HMRC.  You might want to ask a specific question about this on the pension board.  If you do link this posting to it so you don't duplicate too much.  

15 years to retirement - think about what you want to do - take another IT job?  work at the till of a supermarket?  work for a charity?  All good options that might allow you to continue with time at home.  To help make a decision I'd start by putting together a spreadsheet (if you don't have one already) showing all your pensions including the state pension as that will allow you to best consider how you can cover current expenses as well as future ones.  It helped me immensely at my last 2 redundancies at 59 and 64.

Oh yes that's a great way to look at it, one I am trying to do, but sometimes with all the emotions it's hard. I am taking all the advice I can get, but I really do think this is opportunity for change, do something new and different, wake up each morning feeling excited to go to work. I think I have lots of transferable skills so will definitely need to widen the net on searching for jobs.

Great idea on the spreadsheet, who doesn't like one of those - I am in the process of setting one up to budget monthly outgoings, so that can be used no doubt. Thanks!

20vt-rs

Markdavid1962 said:

Hope all goes well, just a couple of points, as I also took a package 3 years ago and was also in IT like you

As you mentioned push money in to pension to avoid tax, especially if reducancy exceeds £30k as you are in IT they may ask you to sign an NDA, if they do they should pay you for this, when you have the offer on the table and having the conversation with HR ask if they have a discretionary pot, with my old employer you had a pot but had to ask and I got an extra few thousand.on top of what I was entitled to.

Besides the notice pay they should pay you for other benefits if you have them (medical, car allowance etc)

Thank you for your feedback / comment, it's helpful. I am digging / working it all out from the info received. Like you say, I will push as much into the pension as I can, some parts not possible but that will help avoid tax, and also come in useful later on.

monkey-fingers

20vt-rs said:

Hi all,

I've received the unfortunate news recently that I will be made redundant in the next few weeks, I'm still processing it all and deciding what the best path is for me, I'll give some background, but would really appreciate some feedback and thoughts from others with a view, who may have been in a similar situation etc.

I have been working in the IT industry for over 30 years with approx. 15 to go before I retire, and have just clocked 29 with my current employer. Having this news is a first for me, and haven't applied for jobs for a very long time! There is a lot to think about, not just what to do next, but also things to wrap up at current employer, redundancy package thoughts, tax, pension etc etc. my head is blown!

Current role has gradually become pretty boring but easily doable, I work remote and don't have much interaction with people unless over a 30-min zoom each day. However, I balance this with the ability to be at home, see the family, head out early to do school runs etc. But I have not had job satisfaction for a long time, not like I used to being out meeting people etc. Pay has been good as well as the benefits. I took the down sides and balanced with the work-life balance and pay etc.

I have been offered a pretty decent package to exit the company, and if I am frugal I could last 18-24 months before needing a new role (although I don't intend on doing this). I will probably look to take the tax free element of this, and put as much as possible into the pension to avoid paying too much tax, unfortunately the pay in lieu of notice (3-months) will have to be taken, and will take me into the 40% tax bracket (Would I be wise to take financial advice on this or just take the hit? I don't think there is a way around it!).

Job and career wise, I have been offered another role internally which I think I could do, but it's not really my choice and I don't feel that excited about it. Additionally, I feel like my length of service even though a good thing sometimes can also become a bit of a ball and chain, and previously I have avoided leaving to preserve this.

My thoughts currently are to take the package to exit the company, use this as a fresh start, do something else maybe, not even in IT that I would find enjoyable. If I don't like it, then I can make a change, keep the redundancy package as the buffer to allow this to happen. I would really like to enjoy the last 15 years of employment, and couldn't really see me doing this for the next 10-15 being honest.

In the meantime, I am working on my CV, researching jobs and trying to decide what to do next! 

Sorry for the long read, but it would help to get it down and see if anyone has some thoughts or suggestions / advice on this.

Many thanks all!

I was bang on the same as you - I'm 54 and got 29 years. If I'd played the system, I'd have had 2 years "take-home" salary (based on year one being £30k+PILON+shares) and £60k into my pension, which I can take next October tax-free when I'm 55.

If you're currently "at risk", ask your company to let you seek opportunities now (or at least do some training courses - plenty of free IT ones where you pay a modest amount for the exam - Microsoft etc. Feel free to ask me the most efficient way to do those)

Remote work is few and far between now -mostly hybrid - and the IT job market right now is properly ugly. I was very lucky to find a job and only had 6 weeks out of work.

DO lean on your network though. Start building it up properly on LinkedIn. I had a lot of older managers and colleagues reach out when I changed my status to "Open to Work". Some were just being nosey. Others pointed out roles in their organisations.

20vt-rs

monkey-fingers said:

20vt-rs said:

Hi all,

I've received the unfortunate news recently that I will be made redundant in the next few weeks, I'm still processing it all and deciding what the best path is for me, I'll give some background, but would really appreciate some feedback and thoughts from others with a view, who may have been in a similar situation etc.

I have been working in the IT industry for over 30 years with approx. 15 to go before I retire, and have just clocked 29 with my current employer. Having this news is a first for me, and haven't applied for jobs for a very long time! There is a lot to think about, not just what to do next, but also things to wrap up at current employer, redundancy package thoughts, tax, pension etc etc. my head is blown!

Current role has gradually become pretty boring but easily doable, I work remote and don't have much interaction with people unless over a 30-min zoom each day. However, I balance this with the ability to be at home, see the family, head out early to do school runs etc. But I have not had job satisfaction for a long time, not like I used to being out meeting people etc. Pay has been good as well as the benefits. I took the down sides and balanced with the work-life balance and pay etc.

I have been offered a pretty decent package to exit the company, and if I am frugal I could last 18-24 months before needing a new role (although I don't intend on doing this). I will probably look to take the tax free element of this, and put as much as possible into the pension to avoid paying too much tax, unfortunately the pay in lieu of notice (3-months) will have to be taken, and will take me into the 40% tax bracket (Would I be wise to take financial advice on this or just take the hit? I don't think there is a way around it!).

Job and career wise, I have been offered another role internally which I think I could do, but it's not really my choice and I don't feel that excited about it. Additionally, I feel like my length of service even though a good thing sometimes can also become a bit of a ball and chain, and previously I have avoided leaving to preserve this.

My thoughts currently are to take the package to exit the company, use this as a fresh start, do something else maybe, not even in IT that I would find enjoyable. If I don't like it, then I can make a change, keep the redundancy package as the buffer to allow this to happen. I would really like to enjoy the last 15 years of employment, and couldn't really see me doing this for the next 10-15 being honest.

In the meantime, I am working on my CV, researching jobs and trying to decide what to do next! 

Sorry for the long read, but it would help to get it down and see if anyone has some thoughts or suggestions / advice on this.

Many thanks all!

I was bang on the same as you - I'm 54 and got 29 years. If I'd played the system, I'd have had 2 years "take-home" salary (based on year one being £30k+PILON+shares) and £60k into my pension, which I can take next October tax-free when I'm 55.

If you're currently "at risk", ask your company to let you seek opportunities now (or at least do some training courses - plenty of free IT ones where you pay a modest amount for the exam - Microsoft etc. Feel free to ask me the most efficient way to do those)

Remote work is few and far between now -mostly hybrid - and the IT job market right now is properly ugly. I was very lucky to find a job and only had 6 weeks out of work.

DO lean on your network though. Start building it up properly on LinkedIn. I had a lot of older managers and colleagues reach out when I changed my status to "Open to Work". Some were just being nosey. Others pointed out roles in their organisations.

Thanks for the info, I'm looking at new positions now, building my CV, re-instated a dormant linked-in profile I had so it's going the right way. Hopefully there will be some fruits from the labour, but the saving grace at the moment is the buffer for exiting the company, just don't want to use it all! 

monkey-fingers

20vt-rs said:

monkey-fingers said:

20vt-rs said:

Hi all,

I've received the unfortunate news recently that I will be made redundant in the next few weeks, I'm still processing it all and deciding what the best path is for me, I'll give some background, but would really appreciate some feedback and thoughts from others with a view, who may have been in a similar situation etc.

I have been working in the IT industry for over 30 years with approx. 15 to go before I retire, and have just clocked 29 with my current employer. Having this news is a first for me, and haven't applied for jobs for a very long time! There is a lot to think about, not just what to do next, but also things to wrap up at current employer, redundancy package thoughts, tax, pension etc etc. my head is blown!

Current role has gradually become pretty boring but easily doable, I work remote and don't have much interaction with people unless over a 30-min zoom each day. However, I balance this with the ability to be at home, see the family, head out early to do school runs etc. But I have not had job satisfaction for a long time, not like I used to being out meeting people etc. Pay has been good as well as the benefits. I took the down sides and balanced with the work-life balance and pay etc.

I have been offered a pretty decent package to exit the company, and if I am frugal I could last 18-24 months before needing a new role (although I don't intend on doing this). I will probably look to take the tax free element of this, and put as much as possible into the pension to avoid paying too much tax, unfortunately the pay in lieu of notice (3-months) will have to be taken, and will take me into the 40% tax bracket (Would I be wise to take financial advice on this or just take the hit? I don't think there is a way around it!).

Job and career wise, I have been offered another role internally which I think I could do, but it's not really my choice and I don't feel that excited about it. Additionally, I feel like my length of service even though a good thing sometimes can also become a bit of a ball and chain, and previously I have avoided leaving to preserve this.

My thoughts currently are to take the package to exit the company, use this as a fresh start, do something else maybe, not even in IT that I would find enjoyable. If I don't like it, then I can make a change, keep the redundancy package as the buffer to allow this to happen. I would really like to enjoy the last 15 years of employment, and couldn't really see me doing this for the next 10-15 being honest.

In the meantime, I am working on my CV, researching jobs and trying to decide what to do next! 

Sorry for the long read, but it would help to get it down and see if anyone has some thoughts or suggestions / advice on this.

Many thanks all!

I was bang on the same as you - I'm 54 and got 29 years. If I'd played the system, I'd have had 2 years "take-home" salary (based on year one being £30k+PILON+shares) and £60k into my pension, which I can take next October tax-free when I'm 55.

If you're currently "at risk", ask your company to let you seek opportunities now (or at least do some training courses - plenty of free IT ones where you pay a modest amount for the exam - Microsoft etc. Feel free to ask me the most efficient way to do those)

Remote work is few and far between now -mostly hybrid - and the IT job market right now is properly ugly. I was very lucky to find a job and only had 6 weeks out of work.

DO lean on your network though. Start building it up properly on LinkedIn. I had a lot of older managers and colleagues reach out when I changed my status to "Open to Work". Some were just being nosey. Others pointed out roles in their organisations.

Thanks for the info, I'm looking at new positions now, building my CV, re-instated a dormant linked-in profile I had so it's going the right way. Hopefully there will be some fruits from the labour, but the saving grace at the moment is the buffer for exiting the company, just don't want to use it all! 

Completely agree.

As an aside, I had a nuclear option, which was to downsize the house to pay off the mortgage and either start claiming a modest pension from next year or doing the odd part-time bit of consulting. In my last few roles, I was doing more consulting / process roles. I'm shocked how "behind" smaller companies and MSPs are when it comes to things like risk management and continual service improvement, for instance. The former often means that contracts end up becoming loss-making.

Ratkin007

if you do not get a job straight away, it is worth considering applying for new style job seekers allowance.  I don't know much about benefits but I believe your savings are not considered for the first 6 months. Many people make the mistake of living of their redundancy and then when they apply they are not eligible because they are outside the 6 month period and have some savings. May be worth looking into as it looks like it is up to £92 per week.