Being made redundant has an immediate impact on your finances. This guide explains what benefits you can claim, how to protect your National Insurance record, and how to estimate how long your money will last.
Universal Credit: You can claim Universal Credit even if you have savings, though amounts are means-tested. Claim the day you stop working — you cannot back-date claims. If you have a partner who works, their income will affect what you receive.
New Style Jobseeker's Allowance (JSA): If you have paid National Insurance for 2 of the last 3 tax years, you may qualify for New Style JSA at a flat rate (£84.80 per week for over-25s in 2025/26), regardless of savings or a partner's income. You can claim this alongside Universal Credit.
Council Tax Reduction: Apply to your local council for a council tax reduction — many councils offer significant discounts or full exemptions for people on low or no income.
Mortgage Support: If you have a mortgage, you may be eligible for Support for Mortgage Interest (SMI), a government loan that covers your mortgage interest payments while you are receiving certain benefits.
If you receive a redundancy payment over £16,000, this will reduce your Universal Credit payments. The full amount must be declared. Statutory redundancy pay and enhanced payments are both treated as capital for benefits purposes.
Claiming Jobseeker's Allowance or Universal Credit also credits your National Insurance record. This is important for your future State Pension entitlement. Even if you receive little or no financial benefit, claiming these credits protects your pension.
Your workplace pension contributions will stop when your employment ends. Your pension pot belongs to you — you can leave it where it is, transfer it to a new employer's scheme, or move it to a personal pension. Do not touch your pension unless you are 55 or older (rising to 57 in 2028), as early withdrawal incurs a significant tax penalty.
This page includes a benefits eligibility checker, a pension impact estimator, a money runway calculator (how long your savings will last at your current spending rate), and a tax-on-redundancy-pay calculator — all free and updated for 2025/26.