Out of work checklist – things to do if you lose your job

Losing your job usually means you’ll have less money coming in every month – a worrying prospect when you’ve got bills to pay. How will you manage while you’re out of work? Here are some things you can do to help get on top of your finances from the start.

Get help with your mortgage or rent

Whether you’ve got a mortgage or you pay rent, your home is probably your biggest expense every month - and that won’t change when you’re out of work.

What to do if you’ve got a mortgage

Step 1 – Check out any payment protection insurance or short-term income protection policies you have that cover you for redundancy. Claim straight away – there’s usually a waiting period before any payout starts, but making the claim is essential to start the clock ticking.

In the past, because of the way payment protection policies were sold, you may not realise that you have this cover. Ask your lender whether your mortgage, loan or credit card is covered by insurance.

If you have insurance and your claim is refused, you may have been mis-sold the policy and could be eligible to claim compensation.

Step 2 – Claim any benefits that you might be entitled to, such as Jobseeker’s Allowance. If you’re entitled to benefits based on your income, you might also be able to get help with paying the interest on your mortgage through the government’s Support for Mortgage Interest which is paid directly to your lender.

Step 3 – Contact the bank or building society that your mortgage is with and ask them what options are open to you. This could be a repayment holiday or just paying interest until you’re working again.

What to do if you’re paying rent

Step 1 – Claim any benefits that you might be entitled to, such as Jobseeker’s Allowance. If you’re entitled to this, you might also be entitled to Housing Benefit to help pay your rent.

Step 2 – Let your landlord know if you think you’ll fall behind with your rent at any point – you don’t want to risk eviction for non-payment, so it’s best to be upfront about your situation.

Step 3 – Speak to a Housing Adviser in your local council’s housing department as soon as you can, especially if your landlord threatens eviction – you have rights as a tenant and your landlord has to follow certain procedures.

If you’re worried that you might be made homeless, you need to get expert advice – visit the Shelter website or call them on 0808 800 4444.

Sort out your income when you’ve lost your job

Case study

“When I was made redundant, I was terrified I’d lose my house – I’d no other income and no savings. But when I signed on at Jobcentre Plus, I found out I could get Housing Benefit to cover my rent and help with my Council Tax too. It was such a weight off my shoulders and meant I could focus on looking for a new job.” – Jean

When you’re out of work you’re likely to be entitled to various benefits, tax credits and rebates – claim them straight away to get some money coming in, and then think about anything else you could do to boost your income. Every penny counts!

Some insurance policies, such as short-term income protection, will replace a proportion of your income for a fixed period when you lose your job. However, don’t buy a new policy if you know that you are likely to lose your job – it’s unlikely that you will be able to make a claim.

Don’t miss out on any benefits!

Already getting tax credits?

Call the Tax Credit Helpline on 0345 300 3900 straightaway and let them know you’ve been made redundant. They’ll recalculate the amount of money they currently pay you based on your reduced income and reduced working hours.

Are you owed any tax?

If you lose your job part way through the tax year (which runs from April to April) you may be able to claim a tax refund from HM Revenue & Customs. It’s worth checking to find out if you’re eligible.

Income boosting ideas

What else you could do to bring money in? For example, do you have a spare room in your home that you could rent out? If you have adult children living with you could they contribute more to the household budget?

Take control of your debts when you’re out of work

Most people have debts of some sort. Everything from your mortgage to a car loan or credit card needs to be repaid, at least in part, every month. Sit down and make a list of your debts and work out which ones you need to concentrate on first.

Some debts are priorities, such as your mortgage or rent, Council Tax, gas and electricity bills. It’s important to look at these ones first and work out how you’re going to pay them.

If you have debts on credit cards or loans, check whether you have payment protection insurance and, if so, put in a claim straight away. Although there is usually a waiting period before the insurance will start paying out, payment should be prompt if you have the paperwork in place ahead of time.

Review your budget

Try our quick and easy to use Budget planner to help you keep on top of your finances.

Do you really know what you spend every month? Now’s the time to sit down and work it all out. That way you’ll have a much clearer idea of what money’s coming in – and what’s going out. You’ll be able to see where you can make savings each month.