YOUR REDUNDANCY AND DEBT ACTION PLAN

Redundancy and

MoneyMagpie Annie Thorpe

Your

Debt Action Plan

Contents Voluntary vs Compulsory Redundancy Redundancy FAQ From Turn2Us 6 4 3 10 16 8 12 14 18 20 Introduction How to Plan for Redundancy Tackling Debt After Redundancy Ways to Make Extra Money Starting Your Own Business Finding a New Job Useful Resources for Your Next Career Steps Chapter 2 Chapter 1 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 8 Chapter 7 Chapter 9

Introduction

Jasmine says:

Redundancy isn’t an easy time for anyone – and, with so many industries struggling after the COVID-19 pandemic hit, it’s the coming months.

That’s why we’ve put together this guide, in partnership with leading charity Turn2Us, to help you plan for redundancy, navigate the process, and make sure you’re

On top of that, redundancy often means unexpected debts quickly mount up, too. At a time when many of us have been on reduced furlough pay for months, being

plan to overcome your redundancyinduced debts and manage your money into the future.

REDUNDANCY FAQ FROM TURN2US

move back to some sense of normality, and the government support schemes come to an end, there is a huge risk that many people will lose their jobs and be pushed

Which is why we support Money Magpie in providing this free, no-nonsense, simple to understand information guide that empowers you, the reader, to control your

Are you being made redundant?

Being made redundant means you are losing your job because the job role will no longer exist or your employer needs less people to do the work. This can happen if your employer is reducing their workforce or if they go out of business. You can volunteer for redundancy if

If you are being dismissed from your job because of your conduct or performance, whether you dispute this or not, then you are not being made redundant.

If you have been made redundant, help may be available to you - depending on your income, savings, health, family and type of accommodation you occupy.

If you were receiving Working Tax Credit whilst employed, you will no longer be entitled to it if you (and your partner, if you have one) aren’t working enough hours, but a four week run-on period may apply.

If you claim Jobseeker’s Allowance or Universal Credit and the decision maker thinks that you voluntarily left your previous job or you were dismissed due to ‘misconduct’, they can apply time decided by the decision maker.

However, if you are made redundant or volunteer for redundancy during a redundancy situation at work, then you should not be sanctioned for this.

Chapter 1

REDUNDANCY FAQ

decide not to take the job as it is not equivalent to the job you have been doing, then you should not be sanctioned for this. You may also try out a new job in this situation for up to four weeks without losing your redundancy rights if it does not work out for you.

payment takes your capital to over £16,000 and you are under State Pension age, then you are not entitled to means-tested benefits (except maybe second adult rebate for Council

If your redundancy payment takes your capital to between £6,000 and £16,000, you may be statutory redundancy payment is deducted from the contractual redundancy payment capital.

Pay in lieu of notice and holiday pay will be treated as earnings for Universal Credit in the assessment period in which they are paid.

https://www.turn2us.org.uk/

Chapter

VOLUNTARY VS COMPULSORY REDUNDANCY

Compulsory redundancy is when your employer is making you redundant without a choice. Voluntary redundancy is where you can choose to take a redundancy package. This helps businesses reduce the number of compulsory redundancies – and often means you’ll get a better severance package.

wake of the COVID-19 lockdown. If you’re not given a choice about being made redundant, be aware there are still rules that must be followed.

Employers have to follow certain rules when making redundancies. They must:

• Select people for redundancy fairly. If you think you’ve been selected based on your age, disability, gender, or pregnancy, this could be unfair dismissal. alternative role.

Your employer must give you the minimum statutory notice. This is:

• One week if you’ve been employed between one month and two years

• An extra week’s notice for each year you’ve been employed over two years and up to twelve years.

The maximum statutory notice is twelve weeks, even if you’ve been with your employer for more than twelve years. these minimums.

2

When a few people are being made redundant, there’s no consultation period. If 20 or more

This is when they’ll make decisions about who will be made redundant, why, and what severance packages they’ll receive. They must work with trade union or nominated ensure statutory rules are followed.

more, it must be a minimum of 45 days. Nobody can be made redundant during this consultation period.

You’re entitled to a minimum amount of redundancy pay if you’ve worked for your employer for more than 2 years. If you’ve worked for them less than that, they must only pay the notice period (which may just be the statutory minimum notice period).

must give you is:

• 2.5 days pay for each full year you were under the age of 22

• A full week’s pay for each full year for the ages between 22 and 41

• One and a half week’s pay for each full year over the age of 41

the maximum redundancy allowance at £16,140. Use the Government’s calculator to check how much redundancy pay you should get.

All businesses must follow these rules. If you think yours is skimping somewhere along the

However, it’s often hard to make them listen. So, if you hit a brick wall with your internal grievance process, get in touch with ACAS. They can help you with mediation and also ensure your employer is following the legal minimums.

www.acas.org.uk

Chapter 3 HOW TO PLAN FOR REDUNDANCY

As soon as your employer tells you that redundancies are on the cards, it’s time to you’ll have the tools ready in case it does happen in the future!

Whether you’ve been in the same job for decades or have only just started, you’ve got experience to add to your CV.

attention-grabbing resume that’ll be easy to personalise when it comes to applying for jobs.

and start connecting with your contacts. Talk to friends and family. Get involved in industrynow’s a good time to turn your experience into a self-employment opportunity – and your

Every penny you can spare needs to go into an emergency fund. Use a savings app that rounds up your spending to the nearest pound, save money by taking your lunch to work, stop buying

These small expenses quickly add up to build an emergency fund. You could well need this to dip into if your redundancy package is minimal – so prepare now. Remember, there’s an entire section dedicated to Saving Money more ways to build your savings fund.

Being made redundant is a really scary time. However, it’s also a great opportunity! Have you been wanting to move career for a while? Perhaps you’ve had a business idea that’s been bugging you for ages. Enforced job loss is a great time to consider what else you could do to earn money – and get started planning before your redundancy happens!

BENEFITS AND FINANCIAL HELP

there for many people facing redundancy.

Universal Credit

If you’ve been made redundant – and not dismissed or resigned – you could be entitled to Universal Credit. This depends on your household income, so if your partner has kept their job you may not be entitled to as much (or any) Universal Credit.

www.universal-credit.service.gov.uk to start making a claim. If your partner is already claiming Universal Credit, you’ll need to add yourself to their claim.

How much you’ll get depends on your age, household income, assets and savings, and whether you have children or a disability.

Council Tax Support

People living alone automatically qualify for a 25% discount, so make sure that’s applied to your bill.

Council Tax Support levels depend on a wide range of factors, such as your Universal Credit and other savings you have. It could be a few pounds a week, or the majority of your bill

Remember: always update your local council with ANY changes in circumstances as soon as

Chapter 4

Discretionary Housing Payments

The trouble with Universal Credit is that the housing element usually doesn’t cover the total

As the name suggests, this is a discretionary payment. It’s not guaranteed, and how much you get depends on various circumstances. However, for those in dire straits, you could see

Emergency Funds

Due to the coronavirus crisis, the Government handed local authorities a fund for them to manage to help those hardest hit.

Many councils have used this to automatically reduce Council Tax bills by £150 for anyone of working age in receipt of Council Tax Support or on a low income.

However, there are other funds available at some local authorities. This could be to help fund emergency items like replacing a broken fridge, or as a micro grant for more general expenses. Each council runs these grants and funds according to their own rules, so it’s worth getting

Find Out What You’re Entitled To

when you’ve been made redundant.

in the wake of the coronavirus crisis, too.

it’s not going to support you in the long-term. Some people, too, may not be eligible for

So, creating a debt plan right now is essential to managing your mental health as well as

Every penny you can save, sweep it into a savings account. Don’t touch it! Unless you really need the funds, leave them alone.

Help to Save account, too. You can save up to £50 a month in this account, and you’ll receive a

Look at your annual, quarterly, monthly, and weekly expenses. Go back through your bank statements, PayPal, and credit cards.

Make a list of all of your expenses in a spreadsheet. This can take a while – but it’s really, REALLY worth doing.

When you’ve got a log of your expenses in the last year, take a look at what you can cut out. use your gym membership? How much did you spend ordering takeaways last year?

Chapter 5

Find ways to make extra cash

are tons of ways you can make extra cash on the side.

make extra cash from it. Marie Kondo it: does it give you joy? Do you use it? Does it have essential sentimental value? Then keep it. If an item serves none of these functions… sell it!

Next, hop onto the Make Money section at MoneyMagpie.com to discover tons of ways to make extra cash on the side. Or, if you want to start your own business following redundancy, take

DON’T PANIC: ASK FOR HELP

Debt is incredibly scary at any time – and it’s even worse when you’ve got the stress of losing your job on top of it, too.

practical-and-friendly ear. Debt isn’t something to be ashamed of – and with so many of us now facing redundancy and debts, it’s becoming an even more open conversation than ever before.

You’re not alone.

interviews, ask a friend if they can help – in return for the favour when they need child-free time. This not only saves money but helps share the emotional strains caused by redundancy and debt.

WAYS TO MAKE EXTRA MONEY

Combat any looming debt by making extra cash wherever you can. A few pounds here and there

Just remember: if you’re turning anything into a regular side income, you’ll need to register with HMRC and submit a tax return every January.

MoneyMagpie Marketplace

It’s based around your local area, so you can market your items or services to people in your neighbourhood.

You could set yourself up as a personal trainer or run classes at your local gym or community centre.

Or, make exercise videos and make money as a YouTuber! You can even sell exclusive access to your workout videos with sites like Patreon, too.

Create and Sell Online Courses

Selling other videos and online courses is a great way to make a passive income. Once you’ve created the course, you don’t need to do much more than market it!

People want to learn everything, from how to speak a new language to how to start a new business. Take the knowledge you’ve earned in your job – or from a hobby you love – and turn

Check out our article for more tips about making and selling online courses.

Become a Tutor

You don’t have to stick to passive income streams if you’ve got something to teach people!

Science tutoring for students, there’s a big market for tutors. You can make upwards of £20 to do this.

Chapter 6

Take Surveys

We love surveys for cash at MoneyMagpie! You can spend a few minutes each day taking short online surveys from the comfort of your sofa, and see your earnings quickly add up.

article about earning money from the comfort of home, too.

Be a Mystery Shopper

Get out and about – and be paid for it! Mystery shoppers are paid for their time and reimbursed for expenses.

All you need to do, once you’ve registered with a mystery shopping company, is carry out the assignments set for you. This could be going to a restaurant, visiting the cinema, or buying something in a shop.

You’ll write a short report on the experience, which is relayed back to the venue to help them improve their customer service.

Consider Clinical Trials

Clinical trials are one way of making large amounts of money in a fairly short amount of time. They are, by their nature, risky, so it’s not a good idea for everyone. However, looking at recent trials, you could – for example – be paid vaccine trial

There are risks, however, so make sure you’re willing to take them on. Read more about taking part in clinical trials.

Find Part-Time Work

look at part-time work in the interim.

in your local area to spot adverts in shop, café, and business windows. You can also put a call

Being made redundant can hit your self-esteem – but don’t let it! The decision is a business a bad job, it’s just not there anymore!

Look at the new things you’ve learned in your current role. Have you taken on new responsibilities? Do you manage people? Perhaps you now handle budgets. List everything that’s a skill you’ve learned since working there.

When you know what you’re great at doing, it’s time to write a new CV. Remember the rules:

• Keep it succinct – no longer than 2 pages

• Summarise a personal statement to explain what you’d bring to the company

• List hobbies or volunteer work

• Spellcheck and proofread

Remember to personalise your CV for each job you apply to: it really helps you stand out against other applicants.

Chapter 7

There are tons of places to look for jobs these days! Check:

• Social media and LinkedIn

• Online job boards like TotalJobs, Indeed, Monster, and Reed

• Local boards like Gumtree

• Your local job centre noticeboards

• Windows of businesses and recruitment agencies in your area

You should also let friends and family know you’re looking for a new job. They’ll pass the haven’t been advertised yet.

Now’s a good time to think about what you want to do next in your career. If you’re struggling and one-to-one advice from your local job centre. Check your local council too – they’ll often run careers fairs and advice workshops for people looking to move jobs.

Sitting at home twiddling your thumbs when you’re in need of a job is tempting – but not distracted by household chores.

Instead, treat your job seeking process like a job in itself. Set your alarm each morning, make a task list of things you need to do that day (like writing a cover letter), and promise yourself you’ll apply for a minimum number of jobs per day.

Job hunting is a numbers game, after all: if you keep at it, something comes along eventually!

to rethink what you want from your work – life balance – and you can set up that company you’ve always dreamed of running.

Being a business owner is hard work in itself, but a lot more rewarding for many people than when you’re starting out.

when you’ll really understand why entrepreneurs love their work-life balance!

How

to start your own business

Take time to follow these steps when you’re planning your business.

on Universal Credit, you could also apply for the New Enterprise Allowance, which gives you business mentorship for up to two years while you’re starting out.

Read everything and anything you can about your potential new business. What’s the industry like? What are the success stories? Who failed spectacularly – and why? Where’s the niche that’s ripe for a new product or service?

The more research you do, the stronger your business plan will be. A good business plan is essential for making sure you can succeed with your new venture, so take plenty of time to get the foundations of your new company started.

Chapter 8

start on a bootstrap – such as digital jobs like writing, software development, or graphic design – but others require more capital.

Look for startup grant and loan options. Use the budget in your business plan to assess how much you need to borrow – don’t forget you’ll need to have living expenses in that budget, too. A good place to start is StartupLoans.co.uk your new venture.

A solid marketing plan needs to happen at the start of your company launch, not long after you’ve started! Build the hype about your new business as soon as you can to start drumming up interest in your business.

Create a strong, recognisable brand and apply the same logo, fonts, and colours across your marketing materials, website, and social media platforms. This makes it much easier for people to recognise your brand

We’ve got an entire section on MoneyMagpie.com dedicated to all things entrepreneur!

hippest restaurant in town, there’s a ton of useful information to help.

Visit www.moneymagpie.com/make_money_categories/small-business-ideas of inspiration for your new business.