REDUNDANCY. helping you. to get to grips with fi nances during redundancy

Transcription

1 REDUNDANCY helping you to get to grips with fi nances during redundancy

2 Contents First things first 2 Budget carefully 4 What next? 6 Who can help? 9 Things to think about 11 Together we ll work it out Facing redundancy is never easy. It causes a lot of stress and anxiety particularly about what it has the potential to do to your finances. But there are steps you can take to help you adjust to your new situation. In this booklet, you ll find information on some of the practical things you may wish to consider doing to put you and your family on a more secure financial footing, as well as information on other resources that may be helpful to you. The important thing is to act quickly and, when it comes to your everyday banking, get in touch with us as soon as you can. Visit your branch and we ll do our best to help you work out ways to deal with your new circumstances as smoothly as possible. 1

3 First things first It s important not to panic or to put things off. There is a lot to take in, but here are some early steps you might consider taking: Talk to your employer about your entitlements Take stock of all your financial commitments Act quickly to get back on your feet sooner. If you plan now, you will be better prepared for the future. Start with your employer to clarify important details about your redundancy: Your date of redundancy The date you ll receive any redundancy package The details of any redundancy package and how it s been calculated The options available for your pension If you can take time off for interviews for new jobs while you are still employed by your current employer If you ll get any help with finding and applying for jobs, for example, use of telephone, computers, photocopying, etc If your employer will help with any form of retraining If your employer will supply you with a reference How long will you have use of any other benefits, such as a company car. Contact your local Social Welfare Office to find out about the benefits to which you are entitled. Information is also available on or You may be eligible for Jobseekers Benefit. In some cases, a redundancy payment can affect when you are entitled to Jobseekers Benefit. However, you should sign on to get PRSI credits. And remember, even if you expect to find work, apply immediately for support as claims can take a while to process. If you have redundancy cover to meet, for example, mortgage or loan repayments, ask your insurance provider if your insurance cover will help you meet debt repayments while you are out of work. We have information on how to claim on page 7 if your cover was taken out with us. Otherwise, get in touch with your provider. Contact the Revenue Commissioners to check if you are paying too much tax now that you are not working or if you have paid too much before. If you pay tax on a redundancy payment, you may be able to get a reduction in tax paid at the end of the year. This is called top-slicing relief. The tax office looks at your average rate of tax paid over the preceding 3 years and applies that rate to your redundancy payment. However, the tax office will not automatically do this, so you must claim it after the end of the tax year. Ask for independent advice if you feel you need to. You can also get free support from the Money Advice and Budgeting Service (MABS) who will help you with money management. 2 3

4 Budget carefully If you re made redundant, you ll quickly need to organise your money, whether that s using your savings or a redundancy settlement to cover your bills while you look for a new job. An easy and simple way to do this is to draw up a budget plan that shows what you have coming in and what you have to pay out. Before you start filling in the budget plan, you might want to round up some financial paperwork recent bank and credit card statements, electricity, gas and phone bills, copies of loan agreements, food shopping receipts, and so on. When entering your figures, keep in mind that your budget plan is there to help you, so don t adjust any of your figures to make the situation seem better than it is, or worse just be as accurate and realistic as you can. Step 1 List what s coming in Write down all the money coming into your household each month after tax and any other deductions such as your partner s income, tax credits or child benefit. Step 2 Identify your priority outgoings Priority outgoings are those payments that could have immediate serious consequences if they re left unpaid, for example, your mortgage or your rent. You should not risk losing your home, for instance, or being left without electricity, gas or water. Listing these priority debts separately from other regular commitments, and your everyday spending, will help you see at a glance what should be paid first, if you are in a position to do so. You can also use this list if you need to contact creditors to work out payment arrangements or repayment holidays. Start with the creditors on your priority list first. Step 3 Record everyday outgoings The regular outgoings you and your family have as a household will also be an important consideration if you re out of work. In a separate column (call it Housekeeping or Everyday spending ), write down all your household s basic living expenses. Include all essential household spending, such as your weekly food shopping, petrol, etc. A quick and easy way to see if you can save money is to look at alternative providers to see if you can reduce your bills. Step 4 Work out how much you owe your creditors Enter a total for your other debt repayments such as your monthly payments to loans, credit cards and other credit debts. Step 5 Examine the difference Once you have all your income and outgoings listed, you can see what the difference will be. A good way to check that you ve included everything is to check the total debits versus total credits on your monthly statements. There is a handy Budget Calculator on our website on to help you calculate your income and outgoings. 4 5

5 Step 6 - Make contact with creditors It s always advisable to contact the companies you owe money to as soon as possible and explain your new financial situation to them. If you have real worries about how you re going to cope, you might want to consult a third party so you can talk to an independent adviser. You can also get free support from the Money Advice and Budgeting Service (MABS) who can help you with money management. What next? Coping with a mortgage and other loans If you have a mortgage or other loans with us, we can help you to look at your options. It really is important to meet with your Bank of Ireland mortgage adviser who will work with you to find possible solutions. Dipping into savings You may feel the best thing to do is dip into your savings to cover expenses. But check whether you have to pay any penalties for taking your money out at short notice. We are happy to review your savings with you and make suggestions to better suit your circumstances. Redundancy and your pensions If you have a pension, make sure you ask your pension scheme provider to explain all the options available to you. In addition, you may have life cover as part of your pension arrangements and this is something you should also consider reviewing. What about savings and investments? Redundancy may mean you now have a lump sum. It is worth spending time thinking about the best way to use this. Should you use it to cover your expenses? Or can you afford to set it aside for the future? Are you thinking of starting your own business? Or do you want to take the opportunity to consider retirement? Talk to us about possible options in this area. Will insurance cover it? Payment Protection Insurance (PPI) helps you continue repaying your loans while you are out of work. When you signed up to your mortgage, you may have taken out Mortgage Repayment Cover (MRC) too. If you have PPI or MRC with us, you can obtain a claim form from Genworth Financial by calling or writing to: Genworth Financial, PO Box 602, Shannon, Co Clare. If you have PPI or Mortgage Repayment Cover with another provider, find out how to claim by consulting your policy document. If you cannot find this document, contact your insurer. Make sure that you know how much your payment protection policy will cover and when the payments start and end. This information will help you plan your budget accurately for the future. Terms and conditions apply to insurance and protection products - benefits are subject to underwriting and acceptance by the insurance company. 6 7

6 Getting back to work If you re facing redundancy, do talk to your employer. You may find there s some free guidance or training that you could avail of to help you in the future. Or you could contact FAS, the State Training and Employment Authority, for expert guidance and resources, or visit their website at One of the best resources available to you is the people you know. If you are looking for a job, you can let the people around you know about your qualifications and the type of job you are looking for. Consider expanding your options by looking at opportunities in other industries. You may double your job opportunities by thinking laterally about which of your skills are likely to be transferable. Make sure your skills are up to date. Updating your skills with a refresher course in a related discipline can be an effective way of demonstrating a continued interest in your field. Remember, too, to review your CV and add new skills that you developed while you were out of work. You could also practice interviews with trusted friends or family who could help with advice. Who can help? You do not have to go through redundancy on your own. Look for support and take up any that s available. Friends and family can provide emotional support. There are also several state services that can help you in different ways. You can get employment and benefit advice from the Citizens Information Service. Citizens Information Board Ground Floor, George s Quay House, 43 Townsend St, Dublin 2. Tel: +353 (0) Website: Losing your job may affect how much tax you need to pay. Check if you are owed a refund from the Revenue Commissioners. You may have paid too much tax while you were working. Revenue Commissioners Dublin Castle, Dublin 2. Tel: +353 (0) Website: 8 9

7 The Pensions Board regulates occupational and personal pension schemes in Ireland and can offer advice on what to do with your pension. Pensions Board Verschoyle House, Lower Mount Street, Dublin 2. Tel: +353 (0) LoCall: Fax: +353 (0) Website: You can get free debt advice and support in dealing with creditors from your local Money Advice and Budgeting Service office. Money Advice and Budgeting Service (Ireland) Tel: Website: Things to think about 1. Don t ignore the problem. 2. Talk to us about your changing circumstances. 3. Take time to plan a new budget. 4. Restructure your mortgage or debts if necessary. 5. Check your redundancy rights. 6. See what benefits you are entitled to. 7. Plan ahead look at savings, investments and pension plans. 8. Could you retrain or start your own business? 9. Ask for help if you need it

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9 We have taken great care in preparing the content of this brochure but we intend only to give you general guidance on how you can best engage with us. This brochure does not contain any legal or other advice. We strongly recommend that you get appropriate tax, legal or other professional advice before making any decision. Bank of Ireland are not responsible for the content of third-party websites. Payment Protection and Mortgage Repayment Cover is provided by Bank of Ireland Insurance Services Ltd, which is a member of the Bank of Ireland Group. Cover is subject to underwriting requirements, and terms and conditions apply. Bank of Ireland Insurance Services Ltd is regulated by the Central Bank of Ireland. The insurance is underwritten by Financial Insurance Company Ltd trading as Genworth Financial. Genworth Financial is regulated in the UK by the FSA and in Ireland by the Central Bank of Ireland. New Ireland Assurance Company plc, trading as Bank of Ireland Life, is regulated by the Central Bank of Ireland. Bank of Ireland Insurance & Investments Limited is regulated by the Central Bank of Ireland. Bank of Ireland and Bank of Ireland Insurance & Investments Limited are tied agents of New Ireland Assurance company plc. Bank of Ireland and Bank of Ireland Mortgage Bank, trading as Bank of Ireland Mortgages, are regulated by the Central Bank of Ireland R (01/11)