Millennials could face up to a £7,000 redundancy gap
21 October 2016
With redundancies on the rise1, millennials could be unwittingly hit with a bill of approximately £5,000 on being made redundant, according to new analysis released today by Royal London. It finds that while the majority of millennials say they are confident they could find a better job within 12 weeks3 of being made redundant, this could still see them significantly out of pocket.
According to Royal London, redundancy for a millennial man could require income or savings of anything from £4,300 to £7,000 to cover the job hunting period, while for a millennial woman that figure could range from £4,100 to £5,100 based on average earnings3. For a man in his 20s this works out as £361.02 per week for each week of their job hunt, once they hit their 30s the figure increases to £457.03. Comparatively for women the figures are £346.40 and £425.354. While some of the income may come from statutory redundancy pay, even the maximum entitlement of £479 for each year worked could leave a gap.
Many millennials have only a short-term commitment to their current role, with many staying in their first few jobs for just two to three years5. Translated into statutory redundancy pay, that could leave someone with just £958 in statutory redundancy pay for two years in a role, or £1,437 for three years. This equates to around 30% of the amount required to cover the period while they are job hunting. People who have been in a role for less than two years are not entitled to statutory redundancy pay, although many may be entitled to benefits such as Jobseekers Allowance6 while they are job hunting.
Debbie Kennedy, Head of Protection at Royal London said: “Redundancies are at the highest level for two years. It is vital even for those with seemingly secure jobs to plan for the unexpected and ensure they are protected. Many millennials will have been in roles for a relatively short amount of time and unfortunately this will impact the statutory redundancy pay they would be entitled to. We urge millennials to consider if they are redundancy ready.”
Getting Redundancy Ready
- Find out how much statutory redundancy pay you would be entitled to https://www.gov.uk/calculate-your-redundancy-pay.
- Consider any additional redundancy allowance you may be entitled to from your employer by reviewing your contract of employment.
- Calculate how much you earn over a three month period, as that is the average time it takes to get a job.
- Review your outgoings against earnings to see if there is a gap and consider how you would support yourself.
- Ensure you have a means of protecting yourself – be that putting by money in savings or considering protection insurance.
- ENDS -
For further information please contact:
0207 506 6719
Notes to editors:
- http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2015provisionalresults#earnings-by-age-group. Based on ONS Employment and Labour Market Survey for those aged 22 to 39. Average 12 weeks to find a job – so average weekly pay x 12. Figures presented are net of tax but may vary dependent on the individual
- http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2015provisionalresults#earnings-by-age-group Man in 20s earns £446.60 gross, in his 30s this rises to £584.80. Woman in 20s earns £422.10, in her 30s this rises to £538.20 gross. Figures quoted above are presented net of tax.
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £93.8 billion. Group businesses provide around 9.1 million policies and employ 3,106 people. (Figures quoted are as at 30 June 2016).