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Protect yourself as job seekers rise by 20%
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Unemployment is rising in Britain: over 100 constituencies have seen the number of job seekers rocket by 20%. How would you cope financially if the worst were to happen? We look at your options
The news of banks collapsing, merging and even being nationalised has set off a domino effect concerning job losses, leaving many people wondering how they would cope financially if they suddenly became unemployed.
More than 4,000 bankers lost their jobs when Lehman Brothers went into administration, setting in motion a chain of events that saw nannies and home-helps laid off, holiday plans shelved and memberships at gyms and private clubs cancelled.
Lehman Brothers was just one of a long line of companies hit by the credit crunch and with many shutting up shop or making people redundant, unemployment is rising at its fastest rate for 16 years.
Professional networking site Workology.com says up to 15 million workers are fearing for their jobs due to the credit crisis. A survey by the site found that people felt they can no longer rely on large organisations for stability.
How much will you get?
If you’re unlucky enough to be made redundant, how much redundancy pay you will receive depends on your age and how long you’ve been employed.
If you’ve been with your employer for at least two years you’ll qualify for a minimum statutory redundancy payment.
If you're under 22, this amounts to half a week's wage, up to a weekly maximum of £330, for each year worked; those aged between 23 and 40 will get one week's wage for each year worked, and those aged 41 or over receive one-and-a-half week's pay per year worked up to a maximum of 20 weeks.
A calculator on Government website, Directgov can help give you an idea of how much statutory redundancy pay you should receive and your firm should pay your redundancy money on your final day of work, or soon after.
The good news is that the first £30,000 of a redundancy payout is free from tax and National Insurance. Above this threshold, payments are added to your earnings for that year and taxed at your highest marginal rate.
by Emma Lunn, 7 September 2008
