If you have just lost your job, the 'benefits' minefield can be difficult to understand. What benefits are you entitled to, how do you claim them, and how quickly can you get them. Short-term cash flow is very often a major problem, but there is help at hand.
You are entitled to claim Jobseeker's Allowance if you have lost your job. You could get up to £58.90 per week if you are younger than 25, or up to £74.35 if you're 25 or over. Other benefits can help with housing and essential costs.
While the UK benefits system attracts more than its fair share of bad press, it has for many people proven to be the lifeline they needed. If you foresee problems at work and potential redundancies, then you should start looking towards the benefits system sooner rather than later.
Know what you need to do, when you need to do it and who you need to speak to.
Continue reading to see what benefits you can claim
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Under current regulations, you will only be entitled to a redundancy payment if you have worked for your employer for at least two years. The system is a little complicated, but we have summarised it below:-
|Under 22||Half a week's pay for each full year|
|Between 22 and under 41||One week's pay for each full year|
|41 and over||1 ½ week's pay for each full year|
In the event that your employer goes bust, you are still entitled to claim your redundancy payment and any additional payments from a central government fund. This fund is financed via national insurance payments and is there to help those deprived of redundancy payments.
If you have lost your job and are in a private/local authority rental property, then you can apply for housing benefit. The degree of support will depend upon the rent you pay and any additional income in your household, such as that from a partner.
Under the new system, housing benefit is paid via the universal credit system, which is amalgamating together an array of different benefits into one payment.
In recent years we have seen some mortgage assistance schemes withdrawn although the mortgage interest scheme (MIS) is still open. This support is available to those claiming an income-related benefit although it is offered as a repayable loan.
It is also worth noting that the financial assistance will only cover your mortgage interest and will not include capital repayments. You may also be eligible to mortgage-related assistance under the universal credit umbrella although there is a three month waiting period before payments commence.
As you would expect, if you find employment in the meantime, you must inform the authorities, and any mortgage support would be withdrawn.
Local authorities offer assistance with regard to council tax for those with no income, in this instance as a consequence of unemployment, as well as those on a low income. It is very important to make your claim as soon as you have been made redundant in order that financial help can commence as soon as possible.
In the early months of unemployment, cash flow will very often be tight, and it can be challenging to make ends meet. So, the quicker you make your claim, the quicker you will receive assistance.
If you are struggling with your debts as a consequence of unemployment, it is very important to contact your finance providers as soon as possible. Be honest and upfront, tell them your situation and if possible also include a plan for the future.
If you can approach your creditors with a viable alternative repayment plan which has been costed and seems achievable, this will improve your chances of getting help. If you don’t tell your creditors what is happening, how can they be expected to assist you?
Many people will only even consider releasing equity from their property as a last resort. However, equity from your property is not earning an income and is not guaranteed. The value of your equity will obviously fluctuate with the value of your property and also the level of mortgage debt outstanding.
So, if you are struggling to make ends meet after being made redundant, then it may be sensible to release at least some equity to repay any outstanding debts and release some of the financial pressure.
Some elements of the benefits system are means-tested; therefore, any payments will depend upon overall household income and capital available. For example, if you were to receive a redundancy payment, this may impact the level of benefits available to you.
This is a system that seems to constantly change and the recent upheaval to the universal credit system is still ongoing. It is, therefore, advisable to approach your local job centre and request a face-to-face meeting.
Many people believe that their mortgage provider will repossess their home for resale as soon as they start to fall behind on their mortgage payments. This is a last resort in the event that your income changes significantly, you will need to contact your mortgage provider.
You may qualify for the mortgage interest scheme which will at least ensure that some payments are made while you seek employment. It may indeed be possible to switch your mortgage from a capital repayment to an interest-only mortgage in the short-term while you restructure your finances.
The repossession and resale of homes is a last resort and far less frequent than many people automatically assume.
Unemployment is a stark reality for many people very often through no fault of their own. Overnight your income can be slashed, your life turned upside down, and it can sometimes be difficult to see beyond tomorrow. There are ways and means of reducing your expenditure; there are numerous benefits you can apply for and contacting your creditors should also be high on your list of things to do.
Where possible, if you have been made aware unemployment is a possibility, then it is sensible to make plans and be ready to put them into action in a worst-case scenario.
Here at Money Savings Advice, we have partnered with some of the UK’s debt release brokers. They have already helped thousands of people reduce and remove a high percentage of debt, and if you are struggling with debt, they can do the same for you.
Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these brokers, then click on the below and answer the very simple questions.
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Money Savings Advice is a trading name of RMM Digital Publishing Ltd. Registered trading address, First Floor, 85 Great Portland Street, London, W1W 7LT. Trading in England and Wales, company number 11550143 with data protection number ZA747669.
Money Savings Advice is a trading style of Consumer Credit Justice Ltd.
Consumer Credit Justice Limited is authorised and regulated by the Financial Conduct Authority, Reference 834486. We are regulated by the FCA in respect to claims management activities.
You do not need to use the services of Consumer Credit Justice, or any other claims management company, to make a claim. You are free to choose an independent solicitor of your choice.