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Your Financial Questions Answered

caroline_elements.jpgResident Financial Advisor Caroline Anstee - Elements IFA answers your questions:

Q - I've just been told that I’ll be made redundant in a couple of months. I’ll be getting some redundancy pay, but I’d appreciate any tips on how to cope financially.

Caroline - As we write, the number of unemployed is forecast to climb close to two million – the highest for almost 12 years. If you’ve been made redundant, you will have a lot of concerns. How will you pay the mortgage? Will you need to sell your car? How will you afford to eat?  
The first thing you need to do is review your budget and look at where you can reduce outgoings. Could you cope with just one car, for example, or spend less on eating out? Put aside what you save over the next few months while you are still working, making sure you have instant access to it if you need it.

Your employer may have provided some support in terms of looking for new employment and what benefits you may be entitled to. Make sure you start claiming as soon as you can, because it can take some time for payments to start coming through. Have a look at the benefits section of www.direct.gov.uk to work out what you should be getting.

If you have concerns about paying your rent/mortgage, or servicing other loans, speak to your lender straight away. You may be able to negotiate a break from payments for a few months, or at least reduce payments. Don’t ignore this because you will simply be storing up potential problems and could blemish your credit record.

Depending on how long you were with your employer prior to redundancy, and how generous they were, you could have left employment with a substantial sum of money.

Receiving a year’s pay all at once can make you feel like you've won the lottery. You may be tempted to go off on a long holiday, pay off the mortgage or treat the kids. But beware, you don’t know how long the money will need to last. Until you have another job lined up, put the money away and draw your usual salary. You may even be able to live on less without having to buy work clothes, lunches out and the cost of getting to and from work.

Once you have found another job, consult an independent financial adviser to discuss what to do with the remainder of your redundancy payment and make it work best for you.

Information provided by : Caroline Anstee - Elements Tel: 01924 351000 Email: info@elementsifa.co.uk  Website: www. www.elementsifa.co.uk

Please Note:  The information provided is only an overview of the regulations at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.

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