Next steps after redundancy
As the financial impact of the coronavirus pandemic continues to mount and the conditions of the furlough scheme change, employers are being forced to consider the future of their businesses. As a result, the potential for making employees redundant is also on the rise.
While this is undoubtedly a worrying time for many people, there are certain steps you can take to make the best of the situation. Whether you have been made redundant or are considering taking voluntary redundancy, it is possible to position yourself strongly on the next step on your career journey.
Firstly, and most importantly, you should prioritise the practical issues. Consider the package that is on offer for you. This includes reviewing any “extras” you may be offered (training courses or help with creating a CV, for example) in addition to understanding the benefits to which you are entitled.
It’s also worth reviewing your tax position. Have you used all of the allowances available to you? The levels and bases of taxation can change at any time. It is also important to understand any reliefs from taxation, as these can also change, and the value of reliefs available is entirely dependent on individual circumstances. Note that redundancy pay (including any severance pay) under £30,000 is not taxable.
Now is the time to get to grips with your spending habits. Sit down and run through your recent bank statements. Understand exactly what you spend your money on and then consider how you can minimise this in the short term.
Your assets could work to help you through a period without regular income. Make sure you are aware of your accessible savings, investments and pensions as well as your mortgages, car loans and other debt to make sure that they are in the right place to support you through this change in circumstances.
If you are over, or close to the age of 55, reviewing your pension options during the redundancy process would be extremely worthwhile. Your pensions could be utilised to assist you on essential spend, or as you look for new work, or, with the right planning advice, they could be used to enable you to retire completely.
Last, but definitely not least, give yourself some time to think, reflect and plan. The prospect of redundancy can, understandably, be a cause of real stress and anxiety, but it can also bring opportunities. Once you fully understand your position, you can consider what you would like to do next. Can you leverage your network to get another role?
Perhaps it’s an opportunity to re-train in another sector? Or start that business you’ve always dreamed of? Taking time to think about what is important to you, and what you need to do to get there, will help you regain control at the end of the redundancy process.