1. Before you are made redundant
First of all, when times are tough, it is vital that you don't bury your head in the sand and hope for the best. Instead you must prepare for the worst as best you can - so that, should the worst happen, you won't be caught completely cold. For instance, most people will be aware that their employer is struggling well before redundancy becomes an issue, but what can you do to prepare?
Know your rights:
If you are worried that redundancy may be on the horizon, look at your employment contract, which will set out your rights in terms of redundancy pay and notice. You can work out how much redundancy pay you might get by visiting the Direct.gov website.
Know the law:
You should also find out what your employer must do before making you redundant. This will help you to make sure you are treated fairly and that your employer provides all the help and support you are entitled to.
Take a critical look at your household finances:
Clearly, if you do lose your job, money is likely to be an issue. If you are worried about losing your job, it's never too soon to see where you can save money on everything from utilities to the weekly shop. For instance see if you could save money by switching energy supplier, ask yourself if you really need Sky Movies, and shop around to see where you can save money on groceries. Finally, look at any monthly payments you make, for instance on credit card debts. Consider transferring your balance to a new card, with a 0% interest offer on balance transfers - shop around to find the best deals and time your transfer to make sure you make the most of the interest free period when you really need it.
Save, save, save:
Do as much as you can to put money aside for a rainy day, choosing a savings account that pays a good rate of interest but will allow you access to the money as soon as you need it. Even a relatively small savings nest egg is better than nothing and remember, if you do make savings on your household bills, put the money away for later. If you already have savings, shop aroundto see if you can get a better rate -remember that many providers are currently paying far better rates of interest to new customers than they do to existing savers.
However, check your current provider's terms and conditions before you move your money - to make sure there are no penalties for taking your money elsewhere. Finally, make sure you know how to go about withdrawing your money from an existing savings account when you need it - in particular, check whether you must give notice before making withdrawals (usually up to 30 days, but maybe more).
Get your CV up to date:
Update your CV and make sure it is as good as it can be. You will need to be ready to get job hunting quickly if the worst happens.
2. If the worst happens and you are told you may face redundancy.
If this happens, your employer must enter into a period of 'consultation' with you - by law they may not simply dismiss you.
During a consultation period the employer must tell you their plans and the reasons for them. They must tell you what will happen during the consultation period and when a decision will be made, and must listen to your concerns and opinions throughout.
Depending on how many people the company plans to make redundant, it must give either 30 days consultation (for 22-99 redundancies) or 90 days (for 100 or more). If the company plans fewer than 20 redundancies, the length of the consultation person will be set out in your employment contract.
This is likely to be a highly stressful time, but it is important that you keep a clear head and make the right decisions. That means understanding the process and making sure you get exactly what you are entitled to, whether you keep your job or not.
3. After the event
If you are unfortunate enough to be made redundant, there are a number of things you will need to consider - to help soften the financial blow, to find financial support if you need it and to make sure you get back on your feet as soon as possible:
If you haven't already found ways to save on your household bills, do it now. Any money you can save will obviously help at this point.
It is possible that, as part of a redundancy settlement with your employer, you will receive a lump sum redundancy payment. Even if the amount is small, it could make all the difference to making ends meet - so don't spend it and don't leave it in your current account where it will be chipped away at all too quickly. Put the money in an instant access savings account where it can gather interest but still be available when you need it. If you already have savings, you might also consider using them to pay off debts that demand regular monthly payments if you can - particularly those subject to high interest rates, like credit cards. Remember however that whilst the money you save by paying off debts may outweigh the interest it would gather in a savings account, your first priority should be to make sure you have money available to pay the bills each month.
Make sure you get the benefits and financial support you are entitled to.
Tackle problems head on:
Despite your best efforts to be prepared, it is possible that, following redundancy, you will have problems making regular mortgage, loan or credit card payments, as well as paying your bills. It is vital that you face these problems head on and deal with them, rather than letting them fester.
First of all, prioritise your debts (and regular bills) and deal with the most important ones first - for instance, contact your mortgage lender and utilities providers as a priority. Tell them about your situation and see how they can help you to resolve it. For instance, if you contact your mortgage lender, tell them you are receiving Jobseeker's Allowance and trying to find work as soon as possible. It is likely they will give you somewhere between three and six months grace, or at least explore other ways to help you lower or meet your payments.
If you are having serious problems paying your mortgage, there is help available from the government.
Get help finding work:
Clearly, finding a new job is likely to be your number one priority. For a range of advice and resources designed to help you find work, visit Direct.gov's website.