|"Independent Redundancy Help" - Established since 2000|
You and your money
Some suggestions for using your money wisely
Redundancy payment can be the biggest lump sum you ever get and so represents a great opportunity. On the otherhand it may have to last a number of years so don't spend it all at once! Consider paying off your debts. Advice is key. Keep an emergency fund. Consider all investment options. If you are going to be claiming benefits there are some constraints on how you can spend redundancy payments.
Paying off your most expensive debts (those you pay the highest interest on) is often a good move before even starting to think about investing any redundancy payments. There are few if any sensible low risk investments that pay you more than you are paying out on servicing debt. Reducing or paying off your mortgage if job prospects look poor or you will take a major cut in salary will reduce your usual outgoings.
See our ten tips for getting out of debt. Click here to read more..
You are wise to consider taking independent financial advice. You have a choice of advisors:
Some people are concerned that commission payments mean advisers who
take them are not fully independent. This is because
Telephone on 0117 971 1177
Many financial advisors (including many bank managers, building societies etc) are tied agents ie they are only able to sell a particular company's products.
If you are getting a decent redundancy payment use that as your emergency
fund. If you are not getting a decent redundancy payment make sure your
savings are easily available in case you need them to pay bills. This
is far cheaper than borrowing!
These are numerous and need careful consideration as to what is right for you , for example
You may feel under pressure to make decisions quickly. Resist! It is a lot easier to make bad investment decisions than it is to make good ones. Research your options carefully and only invest when you are sure that you understand what you are investing your money in.
Investing your lump sum in setting up a business is considered by many people upon redundancy. Think about this very carefully because if you own business fails you may end up with nothing.
Generally keep any redundancy payment lumps in easily available accounts until things start falling into place. Having cleared your debts (if any!) and found a new job, then is the time to consider tax-efficient investments such as Isas or National Savings for your lump sum.
Here are some useful personal finance sites.