Your financial situation during a period of unemployment will obviously be made easier if you receive a sizeable redundancy payment, which can take care of everyday expenses for many months.
While your job prospects remain uncertain, it is advisable to keep most of this in an instantly accessible savings account, and it is worth shopping around to find an account that is paying a market-leading rate. Details of these are widely available in the money sections of national newspapers and on a range of financial websites.
But there is much to be said for first clearing off any short-term debts you have, because you will almost certainly be paying more in interest to service these than you can earn from the very best savings account.
Only once you have started a new job should you consider longer term investment options like stock market investments and increased pension contributions.
Nevertheless, if you are a homeowner and have had to settle for a job that involves a significant drop in salary, you might be better advised to curb your outgoings by using the remainder of your redundancy payment to reduce the mortgage or pay it off altogether.Last Updated
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Coping with a spell of unemployment
