Managing money if your job is at risk

Money Advice Service

Whether your job is already at risk or you’re worrying about potential cuts, one of the most important things you can do at this time is to take stock of your finances. This will help you start to take control and you’ll be able to cope much better if you lose your job.

Step 1 – Take stock of your finances

Use our Budget planner to get a clear idea of your incomings and outgoings.

If you don’t already have a budget listing all your income and spending – now is the time to do it.

Most people underestimate how much they spend each month, so you might be surprised by the results.

Step 2 – Find ways to cut back

For non-essentials –like gym membership and daily coffees – use our Quick cash finder to see how you can save by cutting back on these items.

Once you have a clear idea of how much you’re spending, start thinking about how your budget will be affected if you lose your job.

You can work out what spending you’ll need to cut back on so that you can cope with a lower income.

If you cut back now you could use the money to build up a savings cushion to help you get by if you lose your job.

Take a close look at what you spend your money on and divide it into essential and non-essential items.

Learn How to save money on household bills in our dedicated guide.

Step 3 – Get debts under control

Make sure you pay off priority debts first. These are debts such as mortgage or rent arrears, and fuel bills. Find out more in How to prioritise your debts.

While you’re still in work your credit score will be better than if you find yourself without a job.

So seize the moment.

Now’s the time to look at your debts. Switch lenders to get the best rates and look at paying off as much of the debt as you can, but watch out for early repayment charges.

Step 4 – Check for any insurance

In the past, because of the way payment protection policies were sold, you might not realise that you have this cover. Ask your lender whether your mortgage, loan or credit card is covered by insurance.

Check for any:

  • Payment protection insurance (PPI)
  • Short-term income protection (STIP), or
  • Mortgage payment protection insurance (MPPI)

That you might have previously taken out.

If you lose your job or are too ill to work, you might be able to make a claim.

In the past, because of the way payment protection policies were sold, you might not realise that you have this cover.

Ask your lender whether your mortgage, loan or credit card is covered by insurance.

If you already know that you’re at risk of redundancy, it’s probably too late to take out payment protection insurance.

Most policies have clauses that will refuse to pay out if you knew you were to be made redundant when you took out the insurance or if you lose your job within the first few months of taking out the policy.

If you have insurance and your claim is refused, you might have been mis-sold the policy and could be eligible to claim compensation.

Read our guide on Reclaiming payment protection insurance for more information.

Step 5 – Try to build up a savings cushion

Ideally, aim to have between three and six months of your living expenses saved in an easy access, high-interest bank or building society account.

Even a smaller amount will be useful. Having cash in the bank is always good and will help you manage financially until you find a new job.

Step 6 – Look at ways of making money

Think about other sources of income you can tap into.

For example, did you know that if you have a spare room, you could rent it out and not pay tax on the first £7,500 of rental income?

You’ll need permission from your mortgage provider or landlord to have a lodger and you should let your buildings and contents insurance companies know.

This article is provided by the Money Advice Service.

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When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

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Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

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