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): Eligibility depends on sufficient Class 1 National Insurance contributions or credits in the relevant two tax years and other conditions. Savings and a partner's income do not affect New Style JSA; it can affect Universal Credit. Check current GOV.UK rates and eligibility.
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.
Redundancy payments generally count as capital for Universal Credit; total household capital, not simply the redundancy payment, determines whether the £6,000 and £16,000 thresholds affect eligibility. Declare changes and check GOV.UK Universal Credit eligibility.
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 provides broad budgeting, benefits and tax guidance. Check current eligibility and rates with GOV.UK; estimates are not a benefits decision or individual tax advice.