Redundancy dilemma - help!

Charlton_Taz · 17 February 2009 at 7:09PM

What would you do?

Been offered redundancy package equivalent to approx 9-10 months of take home pay (could pay a tidy sum off the mortgage) or....

Have been offered a choice of roles within the business but am very unsure about whether I will enjoy the offered roles and suspect it could lead to career regression.

Do I take the risk and leave and pocket the cash (could survive on other half's wages just about anyway but would def mean no saving which is v alien concept to me!) and hope I find a job or go for the safe option and stay? (PS current company also has a DB pension scheme which is a valuable benefit I am unlikely to get elsewhere)

ceridwen · 17 February 2009 at 7:29PM

Guess partly the answer depends on how old you are.....errrr....dont want to be rude - but how old are you?

medonna · 17 February 2009 at 8:41PM

Just be careful what you're accepting cos the inland revenue could end up taking a huge chunk of it. I've just been given a redundancy package of £3000 only to end up with only £2,500, the rest went to the inland revenue because it had been labelled as pay in lieu, holidays, loyalty payment etc so just be careful...

Charlton_Taz · 17 February 2009 at 8:52PM

I know....blinkin Inland Revenue..not much of the agreement ends up being actual redundancy pay, so am being taxed on a chunk of it, but have worked out how much it should be so am confident that it should end up as about 9-10 months take home pay.

He..he.! You're not being rude..I'm 31 now. Usually in the industry I work in I would have been pretty confident of getting something else...but in current times there is always the worry that I won't.

TBH my other worry is that my hubby and I have just decided we would like to try for a baby (I'm not getting any younger and all that) so that brings another host of issues when it comes to jobs which is also playing on my mind.

Titus_frogsbutt · 17 February 2009 at 9:57PM

If you are offered a new job
You may well not be entitled to a payment if you are offered a new job with the same employer, an associated employer or an employer who takes over the business. But if the new job is with the same or an associated employer you will only lose the redundancy payment only if the new job is offered before your old employment contract expires, and starts within four weeks.
If you are offered a new job in this way you can put off the decision whether or not to accept it for a four-week trial period. Or if you need retraining, the trial period may be extended beyond four weeks by written agreement between you and your employer. If at the end of the trial period you are still in the job, you will be considered to have accepted it.

Taken from here.
http://www.berr.gov.uk/whatwedo/employment/employment-legislation/employment-guidance/page15686.html

reheat · 17 February 2009 at 11:16PM

medonna wrote: »

Just be careful what you're accepting cos the inland revenue could end up taking a huge chunk of it. I've just been given a redundancy package of £3000 only to end up with only £2,500, the rest went to the inland revenue because it had been labelled as pay in lieu, holidays, loyalty payment etc so just be careful...

In that case it was not real redundancy pay, because the first £30K is tax free. If your company told you it was redundancy and you got taxed on it ... something is very wrong somewhere.

Boomdocker · 18 February 2009 at 8:57AM

Hi Charlton, I did something very similar just recently. My situation was very similar to yours although I do need to find a new job.

I had been very unhappy at my place of work for around 18 months and knew redundancy was coming and that was I likely to be offered it. So I saved an emergency fund during that time. Im 37 and had 19 years service so again did all the math and knew that my redundancy payout would last me at least a year if needed. (which is tax free up to £30k although I didn't get that much!)

It has all worked out fine upto a point. The unfortunate thing for you and I (and everyone else) is the timing of our redundancy offers and the current climate. You need to balance the redundancy cash in your hand with how likely you will find work again if you need too. I don't regret leaving my job one jot however I do have anxiety over finding a new one. That said I am applying, have an interview lined up for next week and a cushion of knowing I can make it to the end of this year at least on what I have saved.

Good luck with your decision. I think you know what to do.

Boomdocker · 18 February 2009 at 9:00AM

Meant to say that any holiday pay in lieu and regular final salary was obviously taxed and NI'd as normal but not the actual redundancy payment. This should all explained and detailed in cash terms in your final consultation.

Again as I knew I was likely to be leaving I cheekily didn't take any annual leave so as much as possible was paid up. :rolleyes:

Charlton_Taz · 18 February 2009 at 1:46PM

Thanks for your replies! Well, I've already ruled out one of the jobs they've offered me as I'd hate it, and am finding out about another one of the roles this afternoon. Have also enquired externally with recruitment consultants and it looks like there are some jobs out there...its not completely dead. Am leaning towards the 'taking the cash' option...argh its tough deciding for certain though!!

Redundancy dilemma - help!

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