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Redundancy and debt

I’ve been made redundant, what should I do?

If you've been made redundant, you may intend to get back into work as soon as possible, but it’s also important to act fast to stop your financial situation becoming worse.

Here are the five steps to keeping on top of your finances if you’ve been made redundant:

1. Contact your creditors

Whether you’re up to date with your payments or not, it’s a good idea to get in touch with your creditors to tell them you’ve been made redundant.

If you let them know as soon as possible, it may be easier to ask for their help if you do begin to struggle to make payments to them later on.

Some creditors may agree to a short-term payment holiday. You can ask for credit card payment holidays and breaks in making mortgage payments.

The missed payments during this period will usually be treated as arrears and interest and charges may continue to be added.

2. Make a budget

If you’ve been made redundant and your income has reduced, you should get a clear understanding of your finances as soon as possible, so you’re not spending more money than you’ve got.

The best way to do this is to make a budget.

A budget lists your income and all of your outgoings, so you can see where your money is going.


It also helps you to see if you have any money left over after paying your bills and living costs each month.

3. Reduce your spending

Facing living on a reduced income can be hard. To make it a little easier, it’s important to adapt your lifestyle to your new financial situation.

This'll help you to make sure you’re not spending more than you can afford. It'll also help to stop your financial situation from getting worse while you’re out of work.

Here are some ideas on ways you could reduce your spending.

4. See if you can increase your income

Even small changes to help increase your income can make a big difference to your financial situation.

It can be difficult but there are a number of things you could try to make a little extra money following redundancy.

What benefits could I get?

If you’ve been made redundant, you may be eligible for:


  • Universal Credit to help with living costs
  • Council Tax Reduction
  • Housing benefit if you’re renting your home
  • Jobseeker’s Allowance if you’re looking for work
  • Employment and Support Allowance if you’re unable to work due to illness

Any redundancy payment you receive might affect what benefits you're entitled to, so use our benefits calculator to find out more.

5. Prioritise your bills

If you have a lot of bills to pay each month but you can’t afford to pay them all, you should always pay your priorities first.

Your priority bills include:


These are classed as priorities because not paying them has serious consequences. This could be either because you must pay them by law or because they help with your basic living requirements.

Find out more about priority debts

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