Unfortunately Redundancy is something that most people will be at risk of at some point during their working lives, particularly in the current economic environment.

If you are being made redundant (or feel that it may be a possibility) and feel you may have been unfairly treated, or you want to ensure that your employer has followed the correct process then you should seek advice from an Employment Lawyer. The Law Society website ( has a facility to search for a lawyer by type of work and geographic location.

A common question we are asked is how Redundancy payments are treated for tax purposes and Her Majesty’s Revenue & Customs have a useful factsheet at:

If you are fortunate enough to have another job lined up (or you have decided that actually now is a good time to start your retirement) we can advise you as to how to invest any lump sum you may have received, how best to replace any lost benefits such as Death-In-Service Life Cover or Health Protection and review your pension arrangements. If you are unsure how long you will be out of work there are some steps you should take initially, such as: -

• Listing your monthly expenditure to see if there are any areas in which you can reduce your outgoings until you are earning again. This will also help you to understand how long any lump sum could last.

However, you should seek advice before even considering cancelling protection policies such as life cover, critical illness cover or health protection; otherwise you could leave yourself at serious risk of a financial catastrophe of a different kind.

• Review your loans and debts. You should seriously consider using any lump sum payment you receive to repay in full any loans, finance agreements, credit card or store card debts. These will often charge high rates of interest, which if repaid can reduce your monthly outgoings considerably.

However, check first whether there are any early repayment penalties. You could also consider whether to repay some or all of your mortgage (if you have one), however, apart from again checking for any penalties, you should ensure you retain sufficient short-terms funds to last until you are earning again.

• Ensure you claim any State Benefits you are entitled to. Visit for more information.

• Ensure you are getting the best possible return on your short-term savings and investments, such as deposit accounts. Visit to search for the best deposit rates available.

Once you find another source of regular earnings and your situation is more settled, we can review your overall financial planning with you to get you back on track with your longer-term plans.

The FCA does not regulate taxation advice.



© 2011 Midland Financial Solutions Ltd



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