Supporting your employees through redundancy: money matters
It’s a sad fact that more than one in four UK companies are having to make roles redundant as a result of the coronavirus pandemic. Redundancy can be one of the most distressing events an employee can experience and the process, often a last resort for organisations, can also be very difficult for employers. Internal resource can be focused on ensuring a legally compliant and fair redundancy process, overlooking the more human aspects.
Many people facing redundancy will have worries about finances and, in the current economic climate, losing their job will only compound stress and anxiety around money. Providing simple knowledge and tools to help tackle finances will help support your employees and positively impact their mental health and well-being.
Here are five key areas that you can help your employees with:
What will they receive? There is a redundancy pay calculator on the Money and Pension Service website (https://www.moneyadviceservice.org.uk/en/tools/redundancy-pay-calculator) to help calculate statutory redundancy payments and any tax owed.. Clearly set out whether your employee will receive any additional payments, such a bonus, owed holiday, or payment in lieu of notice? What will be the tax owed on these payments?
What will happen to their pension and benefits? Will they be able to continue to contribute to the pension scheme after they’ve left? What date will their healthcare cover end? Will ongoing medical treatment continue to be covered? The Money & Pensions Service is a good source of information and advice.
Will they get any state benefits? Will your employee be entitled to any state help, such as Universal Credit or reduction in Council Tax payments? There is a useful benefits eligibility calculator here.
How can they manage what they have more effectively? Providing simple tools and techniques for budgeting and debt management will help your employee understand what’s coming in, what’s going out and where savings could be made. There are lots of free useful tools to use and download on our website here.
Do they need debt advice? There is lots of free help available out there for signposting. You can download a useful list of debt charities here.
Better with Money has launched a redundancy webinar in response to the current pandemic. We cover a range of topics, including the five areas above, in a supportive environment. We aim to help employees take back control as they develop a redundancy action plan. More details are available on our website here, or you can email us at education@betterwithmoney.com . We’ll be happy to talk you through how we can help you to support your employees.