Five ways to redundancy-proof your finances

Unemployment in the UK is now at its highest level in 14 years, official figures have shown. If you're concerned about how you would cope if you lost your job, here are five things you can do to help prepare for the worst...

According to the latest figures from the Office for National Statistics, the number of people out of work in the UK climbed to 2.47m in the three months to July, its highest level since 1995.

This means the jobless rate is now at 7.9 per cent, while the amount of claims for unemployment benefit has shot up to 1.61m, the highest on record for 12 years.

It's no wonder therefore, that many of us are increasingly concerned about our job security.

If you are unfortunate enough to lose your income, you may find you're unable to pay your bills or support your current lifestyle.

Here are five ways you can help protect yourself from financial disaster should the worst happen.

1. Freshen up your finances

First and foremost, give yourself a financial health check.

Look carefully at the current state of your affairs and see if there is anything you can do to cut costs and free up some spare cash.

Address your essential spending and ensure you are not paying over the odds for your mortgage, insurance policies and energy bills.

Be aware that many companies save their most competitive prices for new customers. Therefore it's crucial to take the time to shop around and compare a range of deals.

If you owe money on expensive credit cards and personal loans, find out if you can reduce your interest payments by shifting your debt onto a cheaper balance transfer credit card.

These deals are currently hard to come by for anyone without a flawless credit history, but a balance transfer card is likely to be impossible for you to get should you try after being made redundant.

Therefore, if you think you'll be eligible for one, it's better to apply sooner rather than later

2. Build up an emergency cash cushion

In troubled times like these, it's vital you have an emergency cash fund to fall back on should something go wrong.

It's a good idea to amass a savings pot equivalent to a few months salary so if you do lose your job you will have some breathing space while you decide your next move.

Even if you can only afford to put a small amount into savings each month, it is far better to save little and often than not at all.

Remember, it's important you are able to access your emergency fund as and when you need to. Saving in an easy access account will allow you to withdraw your money at very late notice and do not charge a penalty fee for the privilege.

3. Insure your pay packet

You may want to consider taking out an insurance policy that will protect you in the event you lost your job.

Payment protection insurance (PPI) is designed to pay the interest on a loan or credit card should you become sick, have an accident or lose your job.

PPI can also be referred to as accident, sickness and unemployment (ASU) insurance.

However, ASU insurance can be a different type of policy, with different benefits.

Unlike PPI, ASU insurance may also cover a proportion of your income in addition to your debt repayments if you are unable to work.

Be aware that both policies often come with a long list of exclusions. Ensure you read the small print carefully and understand in what circumstances you are and are not covered.

If you do decide to take out this type of insurance policy, it's crucial you shop around for an affordable deal.

It's never a good idea to simply accept an offer direct from your lender without first checking to see if there is a better deal available elsewhere.

4. Know what your rights

It's important you are aware of what you would be entitled to from your employer and the state if you were made redundant.

Any payout you may receive will depend on how long you have been employed in your job, your age and how much you earn.

Make sure you find out where you would seek redress if you thought you had been treated unfairly in the redundancy process.

In this situation, don’t be afraid to ask for help. The Advisory, Conciliation and Arbitration Service (Acas) and Citizens Advice both offer free, confidential and impartial advice.

5. Keep positive

For many people redundancy is often an incredibly stressful and emotional experience.

However, it's vital you try to remain positive and plan your next move.

Make sure your CV is up to date and sign up to any training courses that may help you.

This means that when you do get an interview for a new job, you will be prepared and able to give the best performance you can.

Victoria Bischoff is a personal finance writer at BeatThatQuote.com

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
PROMOTED VIDEO
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
tech
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

    £40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

    Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

    £45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

    Carlton Senior Appointments: Sr Wealth Manager - San Francisco - Inv AdvisoryFirm

    $125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager – In...

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Day In a Page

    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas
    La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

    Deaf community outraged by La Famille Bélier

    The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
    10 best high-end laptops

    10 best high-end laptops

    From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
    Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

    Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

    The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
    Susie Wolff: A driving force in battle for equality behind the wheel

    Susie Wolff: A driving force in battle for equality behind the wheel

    The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
    Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

    'No abs Adam' plans to muscle in on Usain Bolt's turf

    After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
    Calls for a military mental health 'quality mark'

    Homeless Veterans campaign

    Expert calls for military mental health 'quality mark'
    Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

    Meet Racton Man

    Analysis shows famous skeleton was a 6ft Bronze Age superman
    Garden Bridge: St Paul’s adds to £175m project’s troubled waters

    Garden Bridge

    St Paul’s adds to £175m project’s troubled waters
    Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

    Stuff your own Christmas mouse ornament

    An evening class in taxidermy with a festive feel
    Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

    Joint Enterprise

    The legal doctrine which critics say has caused hundreds of miscarriages of justice
    Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

    Freud and Eros

    Love, Lust and Longing at the Freud Museum