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Making the most of your redundancy pay

Getting a redundancy payment can help soften the blow of losing your job. But working out what to do with your redundancy package can be a bit of a minefield. Whatever you decide, don’t leave the lump sum in a bank account that doesn’t pay any interest.

Voluntary redundancy

Sometimes employers offer voluntary redundancy to avoid having to make compulsory redundancies. Being in this situation can have its benefits, but it’s important to weigh up all the pros and cons before taking voluntary redundancy.

Can you insure yourself against redundancy?

Ever wondered how you’d pay your mortgage or credit-card repayments if you lost your job? Well there is no such thing as fail-safe redundancy cover, but there are some ‘redundancy insurance’ policies that might help you. But, be careful what you buy - at best they might be able to get you through a difficult time – at worst you might buy an unsuitable product.

What to do about debt if you lose your job

Money’s a big worry when you’ve been made redundant or lost your job – and nothing gets you down like debt. Even if you’ve had a decent redundancy payout, keeping up repayments could put a real strain on your finances. Here are some simple steps to keep on top of things.

Do you have to pay tax on your redundancy pay?

“Is my redundancy pay taxable?” is one of the first questions people ask when facing redundancy. Well, as redundancy pay is compensation for your job loss, it qualifies for special tax treatment, so up to £30,000 is tax free. But many people don’t realise that other elements of their package – holiday pay and pay in lieu of notice – will be taxed in the same way as any other pay.

Claiming your tax rebate after losing your job

Have you recently been dismissed or made redundant? If so, you might be able to claim back some of the tax you paid while you were working. This is known as getting a “tax refund”, or “tax rebate”. Read on to find out how to claim back tax.

Early retirement

Early retirement might sound like a good idea if you’re made redundant, or want to make a change, but it’s important to weigh up the pros and cons. Take the time to think carefully about how you’ll manage financially and how it might affect your lifestyle.

Your legal rights when facing redundancy

If you’re faced with redundancy, your employer must treat you fairly and act in accordance with your contract and legal redundancy rights. That includes making sure you’re consulted, following the right selection process and giving you a proper notice period. If not, then you could have a claim for unfair dismissal, or claim compensation for lack of consultation.

Redundancy pay

If you’ve been in the same job for at least two years your employer has to pay you redundancy money. The legal minimum is called ‘statutory redundancy pay’, but check your contract – you might get more.

Changing your career following redundancy

Redundancy can mean new opportunities, including the chance to retrain for a new career. In this guide, you’ll find out where to get financial support and advice as well as your options for retraining. You might find that losing your job opens the door to a new career.

Your pension options if you’re made redundant

Facing redundancy is stressful enough without worrying about what will happen to your workplace pension. So it’ll be a relief to know that help is at hand, and you’ve got options open to you. Here are some simple steps you can take to start sorting your pension out in case of redundancy.

Unfair dismissal versus redundancy

If you think you’ve been the victim of unfair dismissal, such as constructive dismissal, this guide will help you check if have a case. If you find that your employer has not done things by the book, you might be able to claim against unfair redundancy or dismissal.

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