Lost Your Job? Here’s How To Make Your Redundancy Pay Go Further
Your company needs to make cuts. They feel your job can be absorbed into another person’s role, or that your department can be replaced entirely by a new computer programme that performs your duties at double speed.
And so they drop the ‘R’ bomb: redundancy.
Everyone talks about securing that dream job, but few people touch on what happens if a coveted career is whipped away from beneath your feet. Whilst it’s important to remember you’ve not been fired (ergo, you’ve done nothing wrong), redundancy might be the hardest kick in the guts you’ll ever receive: it knocks your confidence, leaves you questioning what you could have done differently, and keeps you awake at night panicking where your next paycheck is going to come from.
But, once the dust settles, redundancy can actually be liberating. It gives you opportunity to step back and determine exactly what you want out of your life and career, something so few of us have time for when we’re caught up in the cycle of our daily 9-5. The key to rebounding from redundancy is to not allow fear to take over, but instead to formulate a plan that allows you to build the life you want. Redundancy should refine you, not define you.
Most employers pay decent redundancy packages so, rather than being daunted, see this fund as your freedom to re-assess your goals, explore your options, and open doors you have previously sidelined. For some people, this will mean seeking new, exciting career opportunities, either within the same industry or within a whole new field (you know that dream job you’ve harboured? – now is the time to find out if it’s really for you). Others might take time to re-assess their priorities and seek a better work/life balance, or perhaps start their own business.
Others still might decide to invest the money received and find a way to make their funds go further. Once you’ve taken the time to regain composure and control, and figured out what you should be receiving with this redundancy calculator, here are eight savvy ways to invest your redundancy pay:
There are a huge number of Individual Savings Accounts on the market, and although cash ISAs are suffering from low interest rates at the moment you may still be able to pick up a good deal for your savings. The most popular products in 2016 are the Woodfood Equity Income Fund and Fundsmith Equity, while bonds are less popular.
Experts say that to make money from wine you’ll need to invest at least £10,000, but as with any investment you should only put in what you can afford to lose. Other tips from this Telegraph piece include purchasing the best you can afford, and investing for a minimum of five years. Even if everything goes completely wrong, at least you’ll have something nice to drink.
A risky way of investing your money, but one which can pay off fantastically if the right product is found. Experts suggest that emerging markets should be invested for the long term rather than short, as this way one is more likely to ride out any rough patches in the early years.
Internet of Things
A more oblique prospect for investment, but an interesting one as well. The connected world will become reality very soon for all of us, and putting money into nascent technology might be a real money spinner. Buying shares in new companies such as Cisco systems and Blackberry is one route, but also actually buying the technology itself – and saving money on bills – could be another.
Property Option 1
Your pay-off might be enough for a deposit on a new home, although it might be difficult to gain a mortgage if you weren’t with your previous employer for long. Better perhaps to keep the money for a year or so, adding to the deposit throughout those 12 months until a lender will give you a favourable deal.
Property Option 2
If you can’t get a personal mortgage (or have already paid it off – lucky you!), then why not consider buying a property to rent out? The buy to let market is buoyant, particularly in London and Manchester, and your redundancy pay should at least ensure a decent deposit and enough to pay legal fees. Failing that, what about a holiday home, in the UK or abroad?
Property Option 3
Rather than going through the hassle of searching out a property and buying it yourself, why not invest in a shared property? Companies such as Property Partner allow investors to lump their investments together, from as little as £50, to buy a house chosen by a property expert because they are expected to appreciate in value. You’ll be paid a monthly amount in rent, dependent on the percentage of money that you ‘put in’ to purchase the property.
Admittedly this is a risky endeavour if you know nothing about art, but it does have its plus sides. Perhaps it’s better to enlist the help of experts and/or knowledgeable friends before diving in as it’s easy to make errors, but the rewards can also be astronomic.