Fucking hell

[Heyheyheygoodbye]

DH is being made redundant. We have literally JUST bought a house. Didn't mortgage ourselves to the hilt but did mortgage ourselves based on his earnings IYSWIM.

The package is good - a year's salary - but he's worked for this company for years. Since he was first a graduate. In the meeting they had the audacity to thank him to developing strategies for the business which mean they can now follow their company goals i.e. downsizing and getting rid of people including him. He's worried this will count against him and he won't get a job with another company. He's 33.

What is the best way to approach the money? DH plans to have a new job as soon as possible but in this climate who knows how long it will actually take? I'm a PhD student (funded, thank God) and part-time admin so don't earn anything like he does. Should we put away X months of bills? Any advice?

Getting made redundant in these times is NOT a black mark against you - especially when a company is downsizing. It happens to the best of people. Its the role they think is no longer required. Not the person. Hiring managers know this. He may be asked why he left his last role and he can just say he was so successful at rationalising strategies, he rationalized himself out of a job. And Smile. But that it was time for new challenges anyway - so it's all good.

Does he have a record of progression at that company? If so - make sure that's clear in his CV. His length of time will indicate that hes loyal - and doesn;t flit from one company to another - a very valuable trait.

Being made redundant is gut wrenching, but it can lead on to bigger and better things. Suggest he take some time to think what he really wants to do. Last job - 7 years ' X of the year', then 2 years later - after being promoted - got made redundant. I cried. A lot. Then I decided to take a few months off, decide what I wanted to do, got a professional qualification while I had the time to study - while still looking - but being choosey. I got a job that fit all my criteria within a couple of months and I''m still there. It's a much more challenging, more rewarding job and I'm doing things I never dreamt possible, and never would have done at my last job. Good luck!

At 33 he will be fine. It wine go against him. Do you have redundancy insurance? I had to claim on it when I was made redundant it was a pain to claim but they did pay out. They also got my CV reviewed by a career coach as part of the package which was very useful.

Thank you both :) He doesn't have insurance but we do have a flexible mortgage and are lucky to have quite a bit of equity in the house so with the year's salary we should be ok.

Thanks for the reassurance about finding something else. I felt too that his loyalty and success - went from a grad temp to a national manager in the 10 years he's worked there - will stand him in good stead.

This is good advice and we are both reassured by it. Thank you!

I would think seriously about putting the redundancy package into paying off further mortgage, this way it will reduce your outgoings. If your mortgage is flexible maybe once your dh has work again in the future, you can take a break and recoup some money for holidays etc.

Will your dh be on gardening leave? What time are they giving him to search for employment?

What are you entitled to? Check this out as a standby.

He will be on garden leave for three months so he will use that time to look as hard as he can for another job. I had the same thought about overpaying but equally I want to keep some back to cover bills for some months as well.

Good thought about checking entitlement. In our cushy arrogance we've never done this but I will now! Thanks

You're in a great position op. Am I understanding this right - three months paid gardening leave and then a years salary? So 15 months before you're pot less? That's bloody good. Speaking as somebody whose dh was made redundant by his company going into liquidation meaning he didn't get redundancy or notice or holiday pay or indeed that months salary......we survived. It was shit but it's cope-able with.
He needs to sign on as soon as he hits the redundancy then he will get entitlement to free prescriptions, council tax reduction etc. All worth having. He needs to treat looking for a job like it is a job. You need spreadsheets of leads and update daily. He needs to talk to everybody he knows and see what's out there. Very good chance he'll be snapped up. There are a lot of jobs which aren't advertised. He should also contact agencies and see if they can place him long or short term. Short term contract could be fun and keep your bank balance topped up. With the skills he's got, a no doubt glowing and guilty reference and no immediate financial worries he's going to be in a very confident position in the job market. Don't sweat it.

bearing in mind something like the first 35k of redundancy payment is tax free so it might work out to slightly over a years salary
put 6 months worth aside into a diff account as an emergency fund if he hasnt got a new job in 6 months
keep the other 6 months to pay the bills while hes looking

check the redundnacy paperwork as ive seen clauses like the redundancy payment wont be paid if hes found another job and starts before the garden leave is up

be honest when hes applying for new jobs, redundancy isnt a bad thing these days and he can use his experince for new jobs

You've got 15 months paid notice for him to find another job. You are over reacting a bit...it's hardly a "fucking hell" situation.....

I take it your do is on LinkedIn? I know my DDs in recruitment and uses this tool a lot in her line of work.

If you sit down and work out your gas, electric, TV licence, water rates, over 12 months, then actually pay them

Don't do council tax, car insurance, house insurances.

Then you have covered the larger bills, pay some of the mortgage and then tackle the job of seeking gainful employment.

15 months, he's 33 and he's had a significant impact on his previous company. There is no need for panic just yet! You will be fine. You've just had a shock is all.

Thanks for the perspective - genuinely. It has been a shock because we've just bought this house. I do appreciate all the advice and will be taking it on board.

Thanks vipers you have reassured me a lot.

I would put his redundancy money in an account that earns interest (you might need more than one (Tesco, Lloyds, Santander etc) and then pay a monthly amount equal or less than his previous salary into your bills account until he gets another job.

You then need to live fairly carefully until he gets a job in case it takes a long time, or is paid less than he is used to earning. Make the money last as long as possible.

If you don't spend all the redundancy money before he gets another job, you then have a savings pot for future redundancies, other unexpected costs or you will be able to live a little better (holiday etc).

His redundancy isn't a disaster this time, because of the big payout. He is unlikely to have that luxury in the future, especially in the first few years of his next job.

Obviously he also needs to do the necessary to get another job - linkedin, job centre, or could he try self employment while he has the luxury of not 'needing' to earn for a while due to the redundancy payout?

BofS the interest earned on savings accounts is so low that you would usually save more on your mortgage payments by paying off part of your mortgage with the same amount, if mortgage rates are higher than savings rates.

I don't think it is necessarily a good idea to commit the money to paying off the mortgage when you don't know how long he is going to be out of work - he could get another great job next week.

Or they could need the money for other living expenses or he might decide to start a business and need capital which he won't be able to borrow if unemployed.

Also, there are many of us getting up to 5% on savings in current accounts on five figure sums, although I accept that this may change over the coming months.

My mortgage interest rate is 0.6% so paying it off makes no sense whatsover. You can't assume they can't beat their mortgage rate with savings - many can.

Other companies that plan to downsize may want to employ him for all the reasons he's worried he won't get another job!

Check now what your PhD institutions allowance is for emergency funding and loans. We can be given up to 8,000 either as a repayable loan or as a one-off payment. Our department also helps out with financial hardship situations by letting those PhD students do the paid open day / mentoring / abnormal activity roles. Do you demonstrate or lecture? Could you do private tutoring if needed?

I'd cut right back on spending now - and start a saving accounts for bills - or, top up those accounts now so you know you don't have to worry about them for the next year.

"He needs to sign on as soon as he hits the redundancy then he will get entitlement to free prescriptions, council tax reduction etc. All worth having. "

He won't get any of those things unless he's on income based JSA. The last time I looked, you had to have under 8K of savings to be eligible for this (and a decent redundancy package should be more than that)

In addition, he will have paid more than his year's NI contributions already, so there will be no benefit whatsoever to signing on. In fact, as they expect you to spend 40 hours per week jobsearching, and showing them evidence of this, it will probably be counterproductive.

He won't be able to sign on whilst he's on gardening leave either, and if he's got holiday days accrued, until these have timed out.

He could claim contribution based JSA after gardening leave and the amount of savings he has is irrelevant. He wouldn't be entitled to any other benefits.

Bofs
The OPs mortgage is flexible, so maybe able to withdraw. But at a rate of 0.6 that would as I said be lower than savings rate and as I said only do it if your rates of mortgage is higher than savings rate.

He could claim contribution based JSA after gardening leave and the amount of savings he has is irrelevant. He wouldn't be entitled to any other benefits.

He could. And he needs to if he doesn't get a job by next year to get the NI credits for his pension. However, the hoops that they make you jump through in looking for work (looking for jobs in not the best possible way for his circumstances) make it borderline not worth it for the amount you get, until you really need to.

Can claim contribution based JSA for 6 mths. Will likely have too much capital to claim after that.

Careful what you do with the money as you can be accused of deprivation of income if you pay off your mortgage and then claim JSA

OP - how are you? What have you decided to do with the redundancy money?