Act now to ease the pain of losing a job
By Jo Thornhill
Last updated at 10:23 PM on 18th December 2010
Many households are facing a painful festive season as hundreds of thousands of public sector workers are sacked. Job losses in the private sector are also rising.
The official number of unemployed stands at 2.5 million and a survey by the Samaritans says more than 30 per cent of workers are worried about losing their job.
Redundancy is painful, but some planning can help to reduce its impact.
Double blow: Fiona Walke has been made redundant twice in the last two years (see below)
PROTECT YOURSELF
Many workers - even those with significant fears about losing their job - have no financial safety net in the form of savings or income protection insurance.
The under-30s and those with young families have become increasingly vulnerable, according to research by insurer Genworth Financial. This is because they are more likely to have bigger debts, larger mortgages and less savings.
Sales of unemployment cover have plunged in recent years due to the widespread mis-selling of payment protection insurance.
Some insurers are now refusing to offer cover to those employed by local authorities or the Government. But provided you have not already been notified of redundancies at your place of work, it is usually possible to get insurance.
British Insurance - the accident, sickness and unemployment insurer - does not discriminate against council workers. Nel Mooy, the firm's managing director, says: 'If people are in doubt about whether they can get cover, it is worth them giving us a call.'
Premiums vary according to age, the amount of cover needed and the excess period. The excess is the number of days you must wait following a job loss before cover kicks in. The minimum is 30 days, but this can be extended to 60 or 90 days.
You may also want to include accident and sickness cover in the same policy - although this will involve a higher premium.
The monthly cost for a 30-year-old wanting £1,000 of monthly unemployment cover with a 60-day excess is £24.30 with British Insurance. Other providers include Paymentcare, helpucover.co.uk and Columbus. Always compare premiums and the benefits before signing up. PPI cover is not suitable for contract workers or the self-employed.
PREPARE
If you're worried about losing your job, take action now. Try to reduce credit card debts and attempt to clear any bank overdraft.
Strive to put cash into an accessible savings account to build a ' fighting fund'.
Draw up a weekly budget and stick to it. Look carefully at your bank statements and ensure that there are no direct debits in place for services - gym membership, for example - that you no longer use.
Simon Webster, managing director at financial planner Facts and Figures in Ashford, Kent, says: 'Even if you haven't had notice of redundancy, it makes sense to plan from a position of strength.
'You should think about switching your mortgage and credit cards to a cheaper deal, for example. This will be difficult, if not impossible, after you've lost your job. Rein in spending and make savings. This will stand you in good stead.'
If you receive a redundancy payment-from your employer, the first £30,000 is tax-free. For more information on your statutory redundancy rights, visit direct.gov.uk.
COMMUNICATE
Once the job axe falls, inform your mortgage lender, credit card provider and energy suppliers.
The sooner this is done the better. Lenders are now required to take a sympathetic approach to those in difficulties.
It may be possible to freeze repayments or switch your home loan to interest-only to ease any short-term financial burden. Credit card providers respond better if you speak to them early. Work out a realistic budget and offer to pay what you can each month.
Debt charities say that the worst thing anyone can do is to bury their head in the sand.
For advice on dealing with creditors, contact the National Debtline on 0808 808 4000.
I've suffered double blow
Fiona Walke, is well aware of the devastating impact of job loss. She has been made redundant twice in the past two years.
But Fiona, husband Paul, 48, an IT project manager, and daughter Natalie, 21, who still lives at the family home in Thanet, Kent, are learning to adapt to their changed circumstances.
Fiona, 42, has been employed in retail for most of her life, working her way up to management. When she was made redundant in April 2008 she was an office manager for a printing company and shop.
She found work six months later in a Government department handling income support claims, but the axe came down on that job in September.
'Two years ago when the first redundancy hit I was not prepared,' says Fiona. 'But once I started working again I was budgeting and saving hard. It meant we had a financial cushion when the second job loss came.'
But despite the preparations, the family has been hit hard. They have been forced to stick to a tight monthly budget, spend less at the supermarket and forget about taking holidays.
Fiona is looking for a new job, but says that if the situation does not improve in the New Year she and Paul will have to sell their house.
Read more: http://www.dailymail.co.uk/money/article-1339812/Act-ease-pain-losing-job.html#ixzz18XQtMRm5
By Jo Thornhill
Last updated at 10:23 PM on 18th December 2010
Many households are facing a painful festive season as hundreds of thousands of public sector workers are sacked. Job losses in the private sector are also rising.
The official number of unemployed stands at 2.5 million and a survey by the Samaritans says more than 30 per cent of workers are worried about losing their job.
Redundancy is painful, but some planning can help to reduce its impact.
Double blow: Fiona Walke has been made redundant twice in the last two years (see below)
PROTECT YOURSELF
Many workers - even those with significant fears about losing their job - have no financial safety net in the form of savings or income protection insurance.
The under-30s and those with young families have become increasingly vulnerable, according to research by insurer Genworth Financial. This is because they are more likely to have bigger debts, larger mortgages and less savings.
Sales of unemployment cover have plunged in recent years due to the widespread mis-selling of payment protection insurance.
Some insurers are now refusing to offer cover to those employed by local authorities or the Government. But provided you have not already been notified of redundancies at your place of work, it is usually possible to get insurance.
British Insurance - the accident, sickness and unemployment insurer - does not discriminate against council workers. Nel Mooy, the firm's managing director, says: 'If people are in doubt about whether they can get cover, it is worth them giving us a call.'
Premiums vary according to age, the amount of cover needed and the excess period. The excess is the number of days you must wait following a job loss before cover kicks in. The minimum is 30 days, but this can be extended to 60 or 90 days.
You may also want to include accident and sickness cover in the same policy - although this will involve a higher premium.
The monthly cost for a 30-year-old wanting £1,000 of monthly unemployment cover with a 60-day excess is £24.30 with British Insurance. Other providers include Paymentcare, helpucover.co.uk and Columbus. Always compare premiums and the benefits before signing up. PPI cover is not suitable for contract workers or the self-employed.
PREPARE
If you're worried about losing your job, take action now. Try to reduce credit card debts and attempt to clear any bank overdraft.
Strive to put cash into an accessible savings account to build a ' fighting fund'.
Draw up a weekly budget and stick to it. Look carefully at your bank statements and ensure that there are no direct debits in place for services - gym membership, for example - that you no longer use.
Simon Webster, managing director at financial planner Facts and Figures in Ashford, Kent, says: 'Even if you haven't had notice of redundancy, it makes sense to plan from a position of strength.
'You should think about switching your mortgage and credit cards to a cheaper deal, for example. This will be difficult, if not impossible, after you've lost your job. Rein in spending and make savings. This will stand you in good stead.'
If you receive a redundancy payment-from your employer, the first £30,000 is tax-free. For more information on your statutory redundancy rights, visit direct.gov.uk.
COMMUNICATE
Once the job axe falls, inform your mortgage lender, credit card provider and energy suppliers.
The sooner this is done the better. Lenders are now required to take a sympathetic approach to those in difficulties.
It may be possible to freeze repayments or switch your home loan to interest-only to ease any short-term financial burden. Credit card providers respond better if you speak to them early. Work out a realistic budget and offer to pay what you can each month.
Debt charities say that the worst thing anyone can do is to bury their head in the sand.
For advice on dealing with creditors, contact the National Debtline on 0808 808 4000.
I've suffered double blow
Fiona Walke, is well aware of the devastating impact of job loss. She has been made redundant twice in the past two years.
But Fiona, husband Paul, 48, an IT project manager, and daughter Natalie, 21, who still lives at the family home in Thanet, Kent, are learning to adapt to their changed circumstances.
Fiona, 42, has been employed in retail for most of her life, working her way up to management. When she was made redundant in April 2008 she was an office manager for a printing company and shop.
She found work six months later in a Government department handling income support claims, but the axe came down on that job in September.
'Two years ago when the first redundancy hit I was not prepared,' says Fiona. 'But once I started working again I was budgeting and saving hard. It meant we had a financial cushion when the second job loss came.'
But despite the preparations, the family has been hit hard. They have been forced to stick to a tight monthly budget, spend less at the supermarket and forget about taking holidays.
Fiona is looking for a new job, but says that if the situation does not improve in the New Year she and Paul will have to sell their house.
Read more: http://www.dailymail.co.uk/money/article-1339812/Act-ease-pain-losing-job.html#ixzz18XQtMRm5
