Take redundancy or not - Advice needed
Discussion
I currently work in financial services selling commercial finance. The department I work in is being closed and I have the option to take redundancy and the pay out will be approx a years salary.
Likely I could find a role internally, either permanent or a 12 month secondment (which would just postpone the redundancy payment).
Having worked for the same company for 20 years, I am honestly a bit scared about leaving the company but I am sure I could find a similar role on the same salary or more.
I am 53 so don't want to retire and financially I won't be able to do this until at least 60.
Any advice or anyoen done anythign similar.
Likely I could find a role internally, either permanent or a 12 month secondment (which would just postpone the redundancy payment).
Having worked for the same company for 20 years, I am honestly a bit scared about leaving the company but I am sure I could find a similar role on the same salary or more.
I am 53 so don't want to retire and financially I won't be able to do this until at least 60.
Any advice or anyoen done anythign similar.
Surely having a year's salary upfront is a no brainer?! Gives you security and takes the pressure off having to find something straightaway. You'll have time to properly search for a new position and won't need to rush in and (potentially) have to take something that isn't a good fit. No point hanging around for another year if you know its coming. Do it now
I’d take it. It’s not often someone is going to give you a lump sum like that and the company has already said they don’t want you there by offering redundancy.
I’ve been made redundant in the past and seen it in other jobs. It seems like the end of the world but everyone I’ve known has just moved on.
I’ve been made redundant in the past and seen it in other jobs. It seems like the end of the world but everyone I’ve known has just moved on.
From what you've said if there is that level of uncertainty about what would happen in 12 months but you have the guarantee of 12 months salary in the bank today I'd be thinking less of the "shock" of leaving but candidly how employable you are if you do leave and if you stay whether you're doing so for any reason other than the comfort and familiarity of somewhere you've worked at for a long time.
I'm leaning towards take the money and run but it's very easy planning other peoples lives isn't it?
I'm leaning towards take the money and run but it's very easy planning other peoples lives isn't it?
You’re in the nice situation where you can’t lose.
If you like the company and there’s an option of another role internally, I’d certainly look at that first. However, you have the luxury of being able to keep the bar high as your fallback is excellent.
What I wouldn’t do is take a 12 month contract on the promise of redundancy at the end of it. A lot can change in 12 months, so there may be some risk of that not materialising. If you can’t find a great internal role I’d bite the bullet, take the redundancy and leave.
If you like the company and there’s an option of another role internally, I’d certainly look at that first. However, you have the luxury of being able to keep the bar high as your fallback is excellent.
What I wouldn’t do is take a 12 month contract on the promise of redundancy at the end of it. A lot can change in 12 months, so there may be some risk of that not materialising. If you can’t find a great internal role I’d bite the bullet, take the redundancy and leave.
Bluequay said:
Without knowing the OP's financial circumstances it could also push him into being a 45% tax payer and therefore mean he gets a lot less than a year's take home. If a large portion of it is taxable receiving it 2/3rds of the way through the tax year could be quite expensive.
Very true but he can then choose to put it in pension etc. The best advice for the OP is to seriously consider it because the opportunity may not come along again and to remember that you miss 100% of the shots you don’t take. If they think they will think “what if?” At some point in the future if they don’t take it then they should take that shot. I’m taking that shot they should get a thorough financial breakdown on what is being offered, tax implications etc and make the decision with full facts
I would take the money and go. Taking a 12 month placement is risky, we would be deeper into a recession, you'll be a year older, another year institutionalised in one place. 12 months pay is on offer now, it might now be in a years time, they might say times are hard, there is no job statutory is all we can give.
I wouldn’t take the money and run personally if you need another job. There’s so much uncertainty out there at the moment.
I would explore the secondment issue. Perhaps this is an opportunity for development and who knows, may open up doors elsewhere.
As others have said, hmrc will be deducting a healthy amount after the first £30k.
Good luck.
I would explore the secondment issue. Perhaps this is an opportunity for development and who knows, may open up doors elsewhere.
As others have said, hmrc will be deducting a healthy amount after the first £30k.
Good luck.
MYOB said:
As others have said, hmrc will be deducting a healthy amount after the first £30k.
To be fair there are very few people who earn enough, even with a years salary lump sum, to push them into the 45% tax bracket. Even if it did then the first 30k being free of tax would balance it in most circumstances so “a healthy amount” is actually “no more than if you continue working for a year” hepy said:
I am 53 so don't want to retire and financially I won't be able to do this until at least 60.
So the essential question nobody has asked - what is your current pension position? Are you in a company scheme? If so, what type? What's the retirement age? At age 53 it's essential you don't shoot yourself in the foot (both feet) by getting the pension side of things wrong. The cost of getting it wrong at that age can be absolutely devastating.
hepy said:
I have the option to take redundancy and the pay out will be approx a years salary.
And does that include a year's pension accrual/contribution as well? It could be a significant element.hepy said:
I am sure I could find a similar role on the same salary or more.
When are you next going to be offered a year's pay neatly packaged and handed to you in a lump, over and above your usual earnings? How long would it take you to "save up" a year's pay if you stay with the company? I suspect the answer to both is a very long time.Take the money and run - as long as you aren't screwing up a generous pension scheme.
When you get the cash lump sum focus on sheltering as much of it from tax as possible, most likely by boosting your pension arrangements. Get proper advice on this if you're not already up to speed on what can be done.
craigjm said:
MYOB said:
As others have said, hmrc will be deducting a healthy amount after the first £30k.
To be fair there are very few people who earn enough, even with a years salary lump sum, to push them into the 45% tax bracket. Even if it did then the first 30k being free of tax would balance it in most circumstances so “a healthy amount” is actually “no more than if you continue working for a year” R.
The Leaper said:
craigjm said:
MYOB said:
As others have said, hmrc will be deducting a healthy amount after the first £30k.
To be fair there are very few people who earn enough, even with a years salary lump sum, to push them into the 45% tax bracket. Even if it did then the first 30k being free of tax would balance it in most circumstances so “a healthy amount” is actually “no more than if you continue working for a year” R.
craigjm said:
The Leaper said:
craigjm said:
MYOB said:
As others have said, hmrc will be deducting a healthy amount after the first £30k.
To be fair there are very few people who earn enough, even with a years salary lump sum, to push them into the 45% tax bracket. Even if it did then the first 30k being free of tax would balance it in most circumstances so “a healthy amount” is actually “no more than if you continue working for a year” R.
[/quote
I agree....and I did not say it was. You interpreted my comment that way, it seems.
I wonder how much income tax the 2% actually pay in total compared to the other 30M or so.
R.
You say you can’t retire yet, but do you need to continue earning at your current rate? When I sold my business (at 50) it wasn’t for an earth shattering amount but it meant I had at the very least a year or two to find something else to do. As it was, I found something completely different for about half the salary and couldn’t be happier right now (been in the current role 6 years now) and will see this out to retirement.
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