Voluntary redundancy - wisdom sought!

No direct advice, but I would see that as a result. My father did the same about 35 years ago , walked into a job that paid 20% more , and the redundancy money paid off the original mortgage and almost the balance on the new house they bought

how does it impact your pension, can you get some put into your pension,

update your CV, and get it out their, if you plan a break/ time off, you'll probably start a new job next monday :0)

is your sector/industry donwsizing/ is the company financiallly sound,
the earlier waves of redundancy always get the better deal..

Do it - we've had a large number take this opportunity - most went with 10 months salary and have decided to do other stuff. Those that I know personally haven't looked back !

If you are wanting to leave and you have the opportunity to be paid to do so, then sounds like you jump at it (although try not to be so instantly keen on the idea in front of management).

I’ve done it twice in my career and both times it worked out nicely.

I’ve known plenty other people who’ve done it and I’ve never known anyone who’s said they’ve regretted it.

Put it another way - if there’s a years salary on the table, by turning it down you’re effectively spending that amount of money to buy your job - which sounds mental because it is

Job prospects are solid

and

I wanted to leave

says it all really.

Only downsides are losing any accrued rights/ perks that came with the service to date, things like sick pay, extra holiday etc. Also bare in mind that it’s very easy to let employees go in the first 2 years of employment, so you don’t have much protection (that “safety blanket” can help with this concern).

I guess you're not a union member, but have a read of the Acas and Gov.uk resources on redundancy.

Your employer should provide funds for a solicitor to review your redundancy agreement*.

You may be able to leverage additional funds for "re-training", especially if you have a collective bargaining agreement.

(* dunno if this is still the case though)

Put it another way – if there’s a years salary on the table, by turning it down you’re effectively spending that amount of money to buy your job – which sounds mental because it is

I'd never heard it described like that before but makes sense.

If you now extend it to 'spending that amount of money to buy a job you don't even want' it's even more mental.

I’ve never known any organisation lay a bunch of people off and be a fun place to be for the next 6/12/18 months (and many never recover) so I’d say you only turn this down if you think the deal is not reasonable or you think there’s a real risk you can’t get a similar job before the cash goes.

my assumption here is this is genuine redundancy and not someone dressing up a compromise agreement as redundancy.  IF that is the case then writing is on the wall anyway BUT they should be providing independent legal advice to ensure you aren’t taking a deal you shouldn’t.

if there’s collective negotiations going on then someone should be making noise about pension contributions and other benefits (healthcare, death in service) etc.

Be careful of when your last day is in relation to the end of the tax year. If you go before April and are already paying 40% tax all of your severance apart from the £30k tax free chunk will be taxed at 40% and perhaps even more. Hopefully you will be on a 3 month notice period that takes you into next tax year so you won't hit this problem.

My wife's last company offered Voluntary, which a few people took.

Those that didn't were made redundant a few months later as the company went bust and they got next to nothing.

If your prospects are good and you're getting best part of a year in your pocket - and you've already said you want to leave.... why wouldn't you?

Get your CV sorted today, get applying.

Take it and bank it.

This is all really useful thanks. The tax year point is one I need to get a little bit more info on. My calculations assume there’s a chance I’ll tip in to FY22 tax and pay slightly over 40% on some of it.

I’m very much feeling this is a no brainer. I’m just looking hard for the critical friend voices, to check.

Thank you 🙂

On the tax thing, you'll get a big wedge tax free, then it's up to you whether you spaff most of the rest into a pension and take the 45% taxable benefit.

I had an 8 week xmas and trousered 20k when i did it, so yeah, get some work lined up and crack on - tax advice above is solid but if youre in the 90 day consultation window now you should land about right.

The first job you land in might not be the right one so keep youre eye on the market, give yourself options

Pension point is a great one. Thank you!

Agree re the first job, it’s about balance isn’t it

The tax year point is one I need to get a little bit more info on. My calculations assume there’s a chance I’ll tip in to FY22 tax and pay slightly over 40% on some of it.

Is there a chance that they could schedule the redundancy date in April? Even if you technically stop working before then?

It’s a good few years since I took redundancy never regretted it, I do recall though that there’s a period post redundancy where if you start another role you are expected to repay your settlement. You’ll obviously want to check this is still a thing.

Turned it down last year worst thing I've done tbh.

It’s a good few years since I took redundancy never regretted it, I do recall though that there’s a period post redundancy where if you start another role you are expected to repay your settlement. You’ll obviously want to check this is still a thing.

I took redundancy 10 years ago - best thing I ever did - they paid me to leave a job I didn't like!

I didn't have any of the above, finished one role on the Friday and walked into the new one on the Monday.

A few years ago my neighbour was on maternity leave from one of the big insurance companies. She went in for a 'keep in touch' day and intended to tell them that she was going to resign and not come back (rich husband, planned to be stay at home mum). Before she had the chance to do that though they told her they were planning a round of voluntary redundancies. She pocketed about 30k for leaving a job that she wasn't going to go back to.

Take the legal advice they're legally bound to pay for, and don't take their first offer. I ended up with a shorter notice period and more money.

I do recall though that there’s a period post redundancy where if you start another role you are expected to repay your settlement.

That doesn't sound right at all....

It's a payment from your existing employer for terminating their contract with you early - you are being paid off for accepting breach of contract.

NB Not the same thing as Statutory redundancy where the state steps in and pays you some money if the company has gone bust and can't meet the minimum amounts.

Always walk, especially if you have good prospects, I should have with my first real job post uni, but instead stayed for a year and hated it, then left of my own accord, dim.

I later took it when offered and although the first job I took after it only lasted 6 months, it wasn't right for me, I've settled again now and I'm enjoying what I'm doing, I also turned down another offer from a London based job that was tough as they were offering good terms, but I really hate the commute and I could tell it was at least 2 days a week in the office.

Wondering if the O.P. happens to work for Amazon..? Either way I'd say go for it and it sounds like you're leaning that way.

I do recall though that there’s a period post redundancy where if you start another role you are expected to repay your settlement.

Think this is a thing in the public sector (or was certainly planned, not sure if it has come in yet).

I've been through it twice, both times it was absolutely the right thing to do.

Check the tax stuff and also make sure you notify DWP (to keep NI, tax, pension etc up to date cos they get very funny if you just drop off the system!).

You may also find you're entitled to some benefits as you're effectively unemployed - it'll depend on your payoff and how much you have in the bank.

If you have the opportunity to take some time out as well, that can be worth a lot. I had about 2 months out last time inc a month in Australia, walked into a new job as soon as I was home.

Also the payoff got me a new road bike!

Haha not Amazon, but there’ll probably be a level of press coverage when it breaks.

Some really good advice here team thank you. Had the offer confirmed, so it’ll just be the notice period pay in lieu negotiation. I’m very inclined to submit my application. Good conversation with my boss who has said he’ll support whichever route I choose.

One of my mates had his resignation letter in his hand, he was retiring. His manger told him to bin it as that day they were announcing redundancy. 3 months later 1 years gardening leave and 1.75 x his salary. Lucky bugger

Did the same.

Resignation letter in the envelope.

Pal (eng manager) told me to hold fire and glad I did.

Great package.

Already had sub-contract work set up.

Company very soon announced redundancies, and shortly after went bust.

Best decision ever. Never looked back.

I took mine around 7 years ago. Had a few months off then got a job I’m still with and enjoying (on certain days at least!)

I got given 90 days notice and a payout which was around 10 months equivalent to annual salary. At the time anything over £30k was subject to tax so I asked the company to put it in my pension as an AVC. Wasn’t more than £2k but no reason to give it away to the tax man.

My role kinda wound down from the day I was given the option to go so I mooched around sort of working without anybody looking at me as they had already moved on from yours truly.

Take the money and run.

Quick edit: just read crazy legs point about benefits, at the time (the government are tweaking rules all the time so do check) my pay off was not means tested against benefits and because I had work consistently for a period of more than two years I was entitled to £75 a fortnight? Might have been a week can’t recall. This kept my NI contributions going. Although for that I did have to go and sign on every fortnight. Also had a Nurse Ratchet type at the job centre, I won’t set foot in that place again.

One of my colleagues had been suffering with her health for a while - nasty flare up with a skin condition - young lass too. She'd not normally have been given severance, but the Director approved her application. She was able to take a break, and has moved to London to be near family and has a new job now.

We were 'told' we'd not get it approved if we applied - we weren't in one of the jobs they wanted rid of. If I was a bit older I would have gone for it.

Lucky b..gger, I missed 2 redundancy options by leaving. Both companies disappeared post takeover, blah blah they wanted the staff, they didn't.

I had better jobs lined up and the HR manager told me I had no chance of vr.

Being a fool I believed him. Tbh glad to be out of it, awful situation the most able got out, the institutionalised stayed to the bitter end.

Good luck

Yes public sector of you leave, then go back inside 3 months (or is it 6?), You pay some back. Start a job elsewhere and that doesn't apply though.

I'm going to guess.... Rail?

I should have done a couple of years ago, especially when a lot of good managers took it. Really needed the job stability at the time and still do.

Just left with the dregs of humanity in management now as they knew they wouldn't stand a chance if they left and they are driving us nuts.

Given the chance again I'd take it. Hindsight 🙄

Take the money (redundancy) and run ... don't look back.

I suspect the company will not last long if they are struggling now. Things will only get worst from now on. Very very difficult to turn things around in this climate.

I took 18 months worth of salary and started my new job the next week! As soon as the consultation period started I just applied for a new role and they were happy to wait until I could pick up my redundancy lumper.

I think the only caveat (and not sure it'll really apply to you) was that I agreed not to go back to the role within 2 or three years (can't remember which) - wasn't the hardest thing to agree too!!!

The people on the next (inevitable) round of redundancies got the minimum statutory amount.

Take: as much money as you can as soon as you can

Leave: as soon as possible

Unless: you think the next offer will be even better ( I have known this to pan out exactly zero times ever)

Always take the free money.
get another job
live off the redundancy cash

throw all your new job earnings into your new jobs staff pension.
pay no tax

pay no NI

get 20% added by the government.

Get to 55 years old.  Take a load of pension tax free. Load up your panniers

cycle round the world.

Take money, smile nicely (optional), leave.
Never look back.

I do recall though that there’s a period post redundancy where if you start another role you are expected to repay your settlement.

Having rethought this I think with the mists of time I’d confused it with the tax free element of the redundancy payment becoming taxable if you took up work to quickly but as I say it was around 16 years ago so may not be relevant today.

Charlie. Love it!

This has been more helpful than I think you all suspect! I’ve spent the last two days speaking with people (friends, trusted colleagues and some people outside in the industry). Everyone has said the same thing. I’ve looked for and asked for dissenting opinions and we’ve not arrived at a different conclusion. There’ll always be reasons not to, but I think my decision making on this is sound.

I’m going to make the jump. If I weren’t nervous, I’d be a bloody idiot. So embrace it.

Thank you all - some really sound words.

Get the money into your account asap. Holding on till 6 April gives them (or the receivers) time to change their minds.

I did similar about 10 years ago, finished one job on 23rd December, started new one in the new year, but the equivalent of a years salary in to moving house.

Only thing I wish I'd done was aim higher in my next job role.

if you plan a break/ time off, you’ll probably start a new job next monday

This happened to me in 2005. Applied for jobs to get some practice and do a few interviews. Third interview 2 weeks from redundancy offered a WFH job. Bang went the summer of walking, climbing and cycling.

I was on the point of resigning as had grown to hate my job and where the company were - had been there since near the start, employee no. 11 I think. Was on point (as above) of handing in notice when they announced round of redundancies (not voluntary) - payoff to leave I job I no longer liked was good (month per year, capped at 12 (b**tards, I'd been there 19..). No regrets. tax-free is still I think limited to £30k but you can invest surplus in other outlets which will reduce liabilities if you so wish.

My dad took vr / early retirement. 14 months later the (quite large) firm went bust and thousands of people went on government minimum. So go on the .gov website and use the calculator to see what that would be for comparison. I suspect there will be many tens of thousands difference between the two numbers.....

And if you go on good terms and things pick up, it is very common for people to end up back in the same place (but with a pocket full of cash).

First offer is always the best offer you are going to get. Take it if you can!

government minimum

although it's a minimum £ per week, its capped to a certain number of weeks regardless of your length of service.