I have been made redundant, what should I do?

Many people want to go back to work right away when they are made redundant. But there are certain things you should do to protect your finances until then.

Here are five steps to keeping on top of your finances:

1. Contact your creditors

Tell the people you owe you have been made redundant. Do this even if you are up to date with your payments.

Speak to them as soon as you can. It may be easier to ask for their help later if you do find it hard to make payments.

You may be able to get Breathing Space. This is when the people you owe give you space to deal with your debts, if you get debt advice. In Scotland, this is called a moratorium.

Some of the people you owe may agree to a short-term payment holiday. You can ask for credit card payment holidays and breaks in making mortgage payments.

Missed payments during this period are treated as arrears and the people you owe may keep adding interest and charges.

2. Make a budget

Making a budget gives you a clear picture of your finances.

• A budget lists your income and spending, so you can see where your money is going
• It helps you to see if you have any money left over after paying your bills and living costs each month

3. Reduce your spending

Living on a reduced income can be hard.

To make it a little easier, you should adapt your lifestyle to your new financial situation.

This helps you to:

• Make sure you do not spend more than you can afford
• Stop your financial situation from getting worse while you are out of work

Here are some ideas on how to reduce your spending.

4. See if you can increase your income

Small changes can make a big difference.

It can be hard but you may be able to make a little extra money after redundancy.

What benefits could I get?

There are several benefits you may be able to get if you are made redundant, including:

• Universal Credit to help with living costs
• Council Tax Reduction
• Housing benefit if you are renting your home
• Jobseeker’s Allowance if you are looking for work
• Employment and Support Allowance if you cannot work due to illness

Any redundancy payment you get might affect what benefits you are entitled to. Use our benefits calculator to find out more.

5. Prioritise your bills

Pay your priorities first if you are struggling to afford all your bills.

Priority bills include:

• Mortgage or rent
• Council tax
• Utilities, such as water, gas and electricity
• Court orders, such as county court judgments (CCJs)
• Any debts secured on your property

These are classed as priorities because not paying them has serious consequences. This could be either because:

• You must pay them by law, or
• Because they help with your basic living requirements.

Find out more about priority debts