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Being made redundant is a major life event and it is vital to prepare for this possibility. You should consider putting away around six months' worth of income to fall back on if need be and also consider insuring yourself against a loss of income.
However, if you have already found yourself out of work, now is the time to ensure you apply for the benefits, tax credits, and allowances that you are entitled to, as well as to start saving money. This blog post is a quick summary of the main benefits but more detailed information can be found at the Government's own site at www.direct.gov.uk.
- Jobseeker's Allowance is usually the primary source of income for anyone actively seeking work. Even if you work part-time, you could be entitled to Jobseeker's Allowance as long as you work less than 16 hours a week and are below the state pension age. The amount you receive will be either based on your past National Insurance Contributions, or based on your income and savings. The maximum period over which JSA will be paid is 182 days.
- The New Deal Programme is designed to give people on benefits the help and support they need to look for work, including training and preparing for work. There are different programmes for various age groups and others.
- Income Support is designed for those who cannot work full-time. You may be eligible if you are aged 16 to 59, and you are either a single parent, or have a long-term illness, injury or disability. You may also be entitled if you take care of someone who has a long-term illness, injury or disability. The amount you receive will be determined by the specifics of your situation. Those with over £16,000 in savings will not normally qualify.
- If you're receiving Income Support or income-based Jobseeker's Allowance you could also get up to a 100 per cent reduction on your Council Tax Bill.
- If you are responsible for one or more children or young people who live with you most of the time, you may qualify for Child Tax Credit. Tax credit is a sum of money deducted from the total tax you owe, and the amount varies depending on your circumstances. Working Tax Credit is also available for those with low incomes.
- Lastly, if you're struggling to pay your rent due to unemployment or low wages, you may be entitled to Housing Benefit which can pay part or all of your rent. If your savings total more than £16,000, though, you will not be eligible.
Money management software can show you your total bank account and credit card balance, and where you are spending from month-to-month. It's common to use periods of unemployment to catch up on your personal finances, and there's never been a better time to learn how to be smart with your money.