Financial planning for redundancy

Being made redundant is not an easy situation to digest.

We recognise that people go through a range of emotions as they come to terms with the reality of being out of work but we’re here to offer an independent view and help people build a long term plan.

Redundancy can seem daunting, but it can open up opportunities. Taking a break, switching careers, retraining, retiring early – these are all possibilities for people leaving their employer.

How you might be feeling

In our experience, the most important step is to take time to process what is happening and not make any snap decisions. The Change Curve was initially created as an academic way of understanding how people react to news of a terminal illness but over time it has been used in many situations where someone receives life-changing news – and redundancy comes into that criteria.

The change curve

Support and direction

It doesn’t cost anything to speak to an independent financial adviser if you’re looking for support and direction (stages 2 and 3). Our impartiality can give you a valuable perspective on your situation and guide your thinking.

In time, when you’ve answered some of the biggest questions that redundancy has sparked, we are on hand to guide your financial planning to make sure you achieve your long-term financial planning goals.

How a financial adviser approaches redundancy

Your redundancy checklist

This is a starting point for you to consider if you’re coming to terms with redundancy, or being placed at risk of redundancy:

  1. Complete a full budget analysis. View our template
  2. Adjust your spending to meet your new reality by defining essential spend and disposable income
  3. If you think you will have problems paying bills, speak to your creditors as soon as possible
  4. Identify your protection gap. Many people get life insurance, critical illness cover, income protection insurance among others through their employer. You may need to source your own cover to replace what was provided by your employer.
  5. Work out how you will approach the future in two scenarios; a quick return to work or no immediate return to work. Consider essential spending and the means you have to cover a fall in income
  6. Be careful to read your redundancy paperwork in detail. You will not want to do anything to compromise the agreement, such as starting a new job too soon. Seek legal advice if you’re unsure of anything
  7. If you received a lump sum from your employer, you should engage an independent financial adviser. You may have questions around how best to use your lump sum and the tax implications of doing so. For example, the amount you can contribute to your pension without incurring a tax charge, which debt to pay off, which investment product to choose and the overall impact of those decisions on your long-term financial plan

Our services

Investing your redundancy settlement

Evaluating your pension and retirement options

Tax planning

Personal and family protection

Who we’ve worked with

Wren Sterling’s IFAs have advised many people being made redundant from UK employers. We also help pension scheme members make the right retirement decisions including their optimum pension choice and investing their retirement savings. In recent years, among other brands, we’ve worked with:

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