Been made redundant?

”Survival Tips

If you are one of the many thousands of workers up and down the country to be told you're out of a job, help is at hand. With money tight, making sure you are getting everything you are entitled to is paramount.

Don't panic

While losing your job is both financially and emotionally devastating, it's really important to stay calm and work out your options.

Firstly, visit your local job centre as soon as you can to make sure you get all the benefits you are entitled to as quickly as possible, while you job hunt. Likewise, visit your local Citizen Advice Bureau if you require extra advice such as legal or technical information.Some of the bigger firms give free redundancy counselling - offering both practical and emotional support to help you find work and sort your finances out. Take advantage of this as anything that helps you re-establish some stability is the key to getting your life and finances back on track.

Redundancy notice and pay - check your employment contract

Check your employment contract and read over your redundancy rights. By law, you are entitled to notice based on how many years you have been working for the company - a week per year, up to a maximum of 12 years.

To qualify for a statutory redundancy payment, you need to have completed at least two years' service. The formula is half a week's pay for each year if you are between 18 and 21; one week's pay up to and including the age of 41; and thereafter 1.5 week's pay subject to a maximum of 20 years. The payment is capped at £330 a week - a dramatic pay cut for those who have been on higher incomes.

Redundancy packages - negotiate the best deal possible
Companies are aware that staff redundancies are a terrible blow to the whole workforce. Beyond your statutory redundancy pay, some employers may also agree to a lump payment - often a month's salary for every year's service - the first £30,000 is tax-free.

If you are paid more than this, the rest is paid at your highest rate - so 40% for those in the top tax band. For those that are currently higher-rate taxpayers there are steps you can take to improve your cash flow position. Ask your company to ensure that this money is paid after you receive your P45 - the tax document you get when you leave your job. This will ensure that only 20% of the remaining payout is taxed at source.

If you do get this money in your last pay packet, then 40% will be deducted at source. In most cases these workers will have to pay the remaining tax in the following year's tax return

You could also negotiate your period of notice and holiday leave in exchange for payment. Or, your boss may allow you to stay in the company medical scheme.

Use redundancy payments to boost your pension

Workers can avoid tax altogether on any surplus by paying this directly into their pension. Under current rules, individuals can pay the equivalent of their annual salary each year into their pension plan and they will receive tax relief on these payments. This means for higher-rate taxpayers a £60 payment is worth £100 in their pension, once the Government has added tax relief. Basic-rate taxpayers have to put £80 into their pension to get the same £100 contribution, thanks to the vagaries of tax relief.)

This is a particularly attractive option for those who are 50-plus. This is because you can draw a lump sum from your pension once you reach the age of 50, so those in this age group can instantly take up to 25% of their pension fund as a tax-free lump sum. In other words they get the benefits of tax relief but can still have access to the majority of this money if they need it for day-to-day living expenses.

For younger workers this may be a tax-efficient option, but it isn't recommended if you think you are going to need these funds in the immediate future - it could be locked away for a long time.

Remember that from April 2010 people will have to be aged 55 or over before they can take a quarter of their pension fund as a tax-free lump sum.

Counting the cost

Sort out all your priority debts such as your rent or mortgage, fuel bills and council tax. It is well worth calculating a fresh budget, post redundancy, to assess your outgoings and costs.

In the current economic climate it is more crucial than ever to factor in redundancy in advance of making any financial commitments - from loans and mortgages, to credit cards and hire purchase agreements.

If you have taken out unemployment insurance - call your provider straight away and find out what you are entitled to. You are likely to be asked to submit a copy of the official letter of redundancy and notice details, so get all your paperwork ready.

For those who have not been made redundant but are worried about their job security, it may be worth looking into income protection just in case the worst happens. Make sure you check the terms and conditions carefully before you buy because providers are clamping down on unemployment cover given the current climate - many insurers will still cover unemployment as long as you have not been officially notified that there will be cutbacks and provided that you are not made redundant in the first 120 to 190 days.

Before you buy any new cover, it's also worth checking what protection you already have in place - if you have mortgage, loan or credit card payment protection insurance you may already be covered for redundancy.

Mortgage worries

For homeowners, redundancy can mean losing more than your job. Repossessions have shot up and the latest statistics show that every 10 minutes a house is repossessed with a rise of 24% in the number of homeowners falling behind with mortgage repayments.

The advice is to contact your lender straight away because if you fall behind on your payments and have not informed them, your lender could apply to the county court for possession of your home.

If you have taken out a mortgage payment protection plan, call the provider and explain your circumstances. The rules on these products are strict and paperwork checks can be lengthy.

Due to the huge escalation in repossessions, there is now an agreement from the major lenders called a pre-action protocol, allowing lenders three months' breathing space. Some lenders may even allow six months but you have to inform them of your situation and your job-seeking efforts.

As of this month, the Government has reduced the length of time for those on benefit to be entitled to housing payments covering the interest on their mortgage. To qualify claimants need to be registered unemployed for at least 13 weeks, as opposed to 39 weeks previously. There are some restrictions and you will need all your mortgage paperwork, but it is worth the effort.

Check your savings - your 'rainy day' has arrived

If you are made redundant, it may be time to dip into your 'rainy day' savings. Building a savings buffer is a great idea but do check if there is not a penalty for withdrawing cash quickly.

And once you've received your redundancy save it carefully. With interest rates at record lows it's hard to make a decent return on your savings at the moment, but there is a big difference between the best and worst paying accounts so make sure you maximise your return.

If you haven't already done so, use your Isa allowance first. You can invest up to £3,600 in a cash Isa and interest is paid tax-free. If you have money left over, go for a standard savings account and look to draw on these funds first because once you take money out of an Isa you lose the tax-break on it. For more information on savings accounts, read Kevin Mountford's article, 'How to choose a savings account'.

Many of the highest interest rates are available on fixed rate accounts, but if you will need your redundancy money to live off, this type of account isn't suitable as you cannot normally access your capital during the fixed term. Instead look for an easy access account that allows penalty free withdrawals.

Among cash Isas, Scottish Widows bank E-Cash Isa is paying 3.6%, while Yorkshire Building Society has the best catch-free standard easy access account at 3.75%. Click here to compare more savings rates.

A word of caution however. Those applying for Income Support and Job Seeker's Allowance will have to declare their savings and this may affect their benefits.

Still in a job but...

Naturally, even if you are still in work the spiraling economic downturn could result in job losses in the future. The best thing you can do is plan now to make sure you are prepared should you be made redundant:

• Make sure you have a savings buffer in place - putting aside some money each month as an income back-up plan is a great idea.



• Tackle your debts. If you have outstanding debts on credit cards or loans try and pay them down as this will be much easier to do while you have an income. If you are made redundant you'll want minimal monthly outgoings.



• If you are struggling with debt, seek advice straight away - inform your creditors if you are having problems and see if they will agree to accept lower payment from you each month.



• Home owners should check that they are fully protected. Update any policies and read the fine print on redundancy and unemployment cover. Mortgage protection policies could be a life-saver - it is one thing to lose your job but losing your home is one risk you could avoid by taking out sufficient cover.



• Most employees never check the redundancy section on their contracts. Dig yours out and see what your rights are - forewarned is forearmed.

Source: MoneySupermarket.com

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A Guide to Layoff Survival

“How do you survive an unexpected job cut and get back on your feet to find employment?”

FastCompany.com guide to layoff survival. From the practical to the philosophical, expert tips on how to survive the fall, and get back in the game

The Axe is Falling ... Amanda did not see it coming. Her most recent performance review was strong, plus she had a great rapport with her manager, so when the year-end layoff rumors began circulating around the office, she thought she had immunity. She should have known better. She, along with the thousands who were axed, never received an invite to the Christmas party and got the worst gift of all, a severance package.

Sadly, Amanda isn't alone. In the US as of November 2007, at least 1,408,852 people have lost their jobs due to mass layoffs, a 6% increase from 2006, according to the Department of Labour’s Bureau of Labour Statistics. And that figure only reflects those who claimed unemployment insurance from employers who cut 50 or more employees at a time.

The unemployment rate went from 4.7 to 5% in the space of a month (from November to December 2007), the largest increase since April 1995. Monster.com’s own employment index, which tracks online recruitment across career sites and job boards in real-time, also posted its first-ever decline in online job ads in November 2007.

While companies downsize for a plethora of business reasons -- to reduce redundancy after a merger or acquisition, to revamp corporate strategy, or to improve the bottom-line -- much of the current job shortage has direct links to the subprime mortgage collapse still reverberating across the country in 2008. Just a few days ago, Citigroup reported record losses ($9.83 billion in the fourth quarter) due to bad mortgage-related investments and loans and will reportedly be slashing 4,700 jobs. With housing prices nosediving and credit becoming ever more difficult to obtain, jobs in manufacturing and construction have been hardest hit, totaling 47% of mass layoffs last year. White-collar jobs are hardly any more secure. Companies that service the housing industry (insurance, mortgage, real estate brokers and banks) were quick to downsize; jobs from media and technology to the usually strong biotechnology/pharmaceuticals also followed suit as a reaction to weak performance in a slowing economy.

You may not be at risk of being laid off but there is definitely anxiety over job security in the workplace. If you follow the news at all, it certainly feels as if everyone and everywhere is downsizing. So how can you avoid being the sacrificial lamb for your company?

According to University of Colorado Denver management professor, Dr. Wayne F. Cascio’s research on the culture of downsizing ... there isn’t much individuals can do. Downsizing has simply become the de-facto quick fix to address business woes in the US, so being laid off is an unavoidable aspect of corporate life. "A young adult should expect to be laid off three to four times before he turns 50," he advises.

While there may be optimism in the job market, being laid off can wreak havoc on your psyche, which could play a bigger role in your ability to rebound than you think. No matter how you got the news -- you were denied access to your office via a deactivated security pass or gently let down by your manager -- you’ve lost your livelihood and in many cases, your sense of self. Like a relationship gone bad, losing your job can be incredibly painful and life-changing. But it doesn’t have be tragic.

Pulling Yourself Together

Allow yourself to mourn: When you lose your job due to layoffs, you’ll feel as if you’ve been dumped by your employer. You’ll feel betrayed, hurt, dejected and angry, which are common emotions associated with grief. "Mourn the loss of your job and get some emotional distance so you can regain the strength to find a better one"

Be resilient: "You’re bound to encounter rejection in your job search, so you need to be resilient," offers Dr. Andrew Shatté, co-author of The Resilience Factor. He believes you can train yourself to be mentally stronger by knowing your own thinking patterns and counteracting against your natural inclinations. You can uncover your innate resilience factor online (click on"How resilient are you?").

Talk it out: Women tend to refocus and start their job search faster than men, because they’re more comfortable talking about their needs and anxieties to family and friends, and doing so helps them move beyond the shock and anger to start thinking about 'What’s next?'" It’s not that men have nothing to say -- they just need to find the appropriate support group to open up to. When Test-Drive Your Dream Job author Kurth lost his dotcom job in 2001, he and a few other job seekers would meet every week to share job search experiences over coffee and bagels (a.k.a. "Unemployed Bagels"). He recalls how all the members in the group eventually managed to bounce back and find jobs they love.

Set a budget: You’ll need to put together a budget to reflect your newly unemployed status.

Getting Back in The Game

Set goals: Brainstorm on what to do next with your family and friends, get your ideas down on paper -- stay organized and focused. Make a list of all the things you loved, hated, and would like to change about your life and ex-job. From here, you can begin brainstorming about your short and long-term goals. What other careers have always intrigued you? Are you an entrepreneur at heart? Would switching fields require additional training? If so, where, and how much would it cost? Above all, share your plans, however preliminary, with your support group so your friends can keep you on your toes.

Network, network, network: Be upbeat and positive even if you're not feeling that great about yourself. Make a point of getting out of the house and interacting with people. The more people you meet, the better. Create your own network in addition to attending professional networking events. A good way to ensure you get out there and do meaningful work is to volunteer your time for a charitable cause, according to Challenger. You never know who you will meet and what connections they may bring.

Try to identify people whose work appeal to you in some way and make a point of meeting them. Offer to take them out to coffee or even lunch. You'd be surprised how helpful people can be.

And by all means, get up to speed with all the major social networking sites like LinkedIn, Plaxo, MySpace and Facebook. Get reacquainted with your acquaintances.

Through all your networking efforts, stay organized in order to make best use of your contacts.

Limit your computer use: You’re wasting your time if you devote all your time responding to online job ads. Spend your day meeting and interviewing with people, not in front of your computer.

Take breaks: Whether it's going out for dinner once a week (within your means, of course), going for a run every other day, or both, taking breaks from your job search is essential to your mind-body wellness, which will help you stay energetic and motivated.

There is no denying being downsized is difficult, and bouncing back, harder still. But it is not impossible. "[Being laid off] can be a tragedy or an opportunity," ... "Turn it into an opportunity of a lifetime. "

Source: Fast Company

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Is the M&A Boom Over?

“That’s the question McKinsey poses in Dec 27th McKinsey Quarterly.”

M&As tend to boom when interest rates are low (it’s easier to borrow money) and when companies are undervalued (they can be split up and resold at a profit). But the wave of European deals in 2006 noted by Ian Scott of Lehman Brothers “seem to be more about industry consolidation and the political desire to create national champions in sectors such as energy” - “if companies are getting together for reasons other than valuation or financial consideration, I suppose that isn’t quite such a good sign,” so whilst buyouts continued to dominate the headlines on a weekly basis back in 2006, and following James Rossiter September 2007 Times Online comment ... Restructuring has been named as the "the hottest game in town" according to ... the M&A boom is over, 2008 is shaping up to be a tough year.

Deal making in 2007: Is the M&A boom over?

* A wrap-up of 2007 M&A activity finds that the volume of mergers and acquisitions reached new heights during the year but then fell precipitously after the subprime-lending crisis made credit tighter. Nonetheless, suggestions that the M&A boom has met its demise may be premature.

* Most of the decline in M&A since August was concentrated in private-equity deals; corporate acquisitions continued apace. In a market characterized by tighter credit and a heightened appreciation of risk, this M&A boom will continue only if the more fundamental forces behind it, such as the surging activity of acquirers in emerging markets and increasing cross-border activity, continue as well.

* Furthermore, deal makers largely continued to exert greater discipline in M&A, as evidenced by metrics for the value that deals created and by the smaller number of acquirers overpaying for acquisitions.

McKinsey Exhibits:
*1: Slow-down in M&A over the last few months of 2007 concentrated largely in the private-equity sector.
*2: M&A deals continued to generate strong value in 2007.
*3: The acquirers’ share of the overall value created by deals has improved somewhat.
*4: The levels of value created by deals in different sectors and geographies continue to diverge significantly.

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