Five ways to redundancy-proof your finances
Tuesday 22 September 2009
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
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
- 3 Arturo Vidal to Manchester United: Midfielder set to force through move to Louis van Gaal's Red Devils - reports
- 4 Disney heiress Abigail disowns her share of family profits in West Bank company
- 5 Israel's propaganda machine is finally starting to misfire
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
Day In a Page
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000