Planning for redundancy in 2/3 years - any advice please?

[ifonly4]

They're amalgamating three departments where my DH works in about three years time, so luckily we have lots of notice. DH can:

i) relocate and keep his job - we didn't even have to discuss this one as we both knew neither would want to relocate to that area

ii) Early redundancy will offer a better package - DH prefers this option as he'll be around 55 and he knows the redundancy package usually reduces around 56/57. This will cover our mortgage and leave us with around £10,000. He can take his pension earlier, but it will be at a reduced amount. If not, he'll get around £12,000 when he's 67.

iii) Stick it out to the end and see what package they offer you, usually less then (ii) above.

Just wondering if anyone has any advice. Do we save, save, save so we have as much as possible put away, try and reduce the mortgage? Anything else we wouldn't think of? Does anyone have any advice, any do's or don'ts?

If you both can cover the bills until he can claim his pension, I'd go with (b). Otherwise, I'd go with (c) and OH uses the time to save money and to retrain.

When we restructure at work, we've given staff choices and sometimes, this is more unsettling rather than enforcing a decision.

If go with (ii) but not take the pension earlier, save save save now, and use the £10k as a buffer while he looks for work. Without needing to pay for the mortgage, how long will the buffer last?

Go for option 1. With the mortgage gone your monthly bills can be low. Work out what they are and see if you can save a couple of years worth now. Your dh could then take time to find more employment.

Depends on your situation, his salary / package and how easy he will find it to get a new position. If his post is very niche and his package is good, you don't work or don't earn much and you have nothing to keep you in the geographical area maybe you should consider him relocating (renting) for a few years to get a better pension. Otherwise, what are his plans to bring in a salary from 55- state pension age (67?). Alternatively, can you keep the show on the road?

It's hard to find employment after 55 ime.

I would say either start looking for another job now (although that's risky as then he loses the redundancy payoff), or save like crazy now and do option 2, but think about how to survive through self-employment afterwards if he doesn't get a new job.

Work out a budget now for when it happens so you know how much you need to live on without eg commuting costs and mortgage. And work out what you can save on - eg maybe more time to shop carefully and cut costs.

Pumping money into a pension now may be a good, cost-effective idea, but take advice on that from an independent expert.

Thanks for your replies. If I stay in my present job, I'm fairly sure I can get more hours. As it happens DH is in the middle of a course to retrain (in his own time) in the hope he would have got a different job in his department. Obviously he can't guarantee an outside job could come out of it, but it'll be something else he can offer. He can do this on a voluntary basis so that would keep him in touch with this work until he leaves. He's also worked in a bar and childrens care home before, so has said he'd look into bar or care home jobs if needs be.

Personally I'm all for him taking his pension as late as possible as it'll be higher. I will have a good look at our bills and how much we need to cover the basics. That may help us focus and how long the £10,000 could last, alongside extra part-time hours for me, unemployment benefit (or whatever it's called these days).

Tax credits / universal credit possibly.

I mean, that's what it's called these days. Maybe he could go self employed / consultancy depending on what he's retraining as

It's called Jobseeker's Allowance (at least it was four years ago). And if you're married and your spouse works, then you are only allowed to claim it for a maximum of six months.

Definitely do a budget and work out how viable option 2 is. Without doing that, you can't really make a decision (although option 2 does seem the most sensible on the face of it).

he knows the redundancy package usually reduces around 56/57

can you explain this a bit more please? If its just statutory redundancy then this certainly is not true, he'd get 1.5 weeks pay for each year he worked whilst over 41, plus 1 week for all other years; capped at 20 weeks pay. Maximum payout is £14,370.

Ifailed, option 2 is an enhanced package to encourage staff to leave of their own accord rather than because they have to make them redundant. DH works in the area that deals with this, so knows the package is reduced around 56/57. The package for him would be around £54,000 so a lot more than the maximum payout you mentioned. Obviously if he leaves early then he may not be earning so have to take all that into account. I'm just glad we've got lots of notice to work out what's best for us and think about future work.

Ah, OK. ifonly4

It still sounds a bit ageist though, but then the usual calculations for redundancy are ( ie extra weeks depending how old you are).

Good luck to you both, whatever happens.

If he leaves of his own accord, he will have made himself unemployed and risks being disqualified for some / all of his JSA.