UKC

Have you accepted voluntary redundancy at any time in your career?

Anything positive or negative to say about that decision?

I've a lot to ponder at the moment and need an alternative point of view to my 'security first' mindset.

I guess it depends on what the deal is and what's the risk that you may get made redundant later but at the bare minimum settlement.

Also how easy will it be to get another job before you spend your money?

The offer is good, but I'm 55 with two kids and a mortgage.

That's the $65,000 question.

But I don't only want advice about my situation, more other people's experiences.

I took VR at 56 and don't regret it, but was our financial situation was good so don't need to tap into savings until I was 60 and pension kicked in, I am fit and healthy so took up climbing again and always run and cycled and kept myself busy.

However I do think for some persons it might be difficult to replace work with something to keep you satisfied and happy, work might not keep you satisfied and happy but it does pass the time.

Interesting, I would not consider my situation as early retirement; I would definitely be seeking employment but it would inevitably be lower paid.

Pension? 55 can be a pretty important age if you have a workplace pension.

Being made redundant at 55 would be a dream for me, but obviously not everyone’s circumstances are the same.

I took voluntary redundancy 15 years ago. 3 months pay tax free and other add ons led to a decent cash lump sum. 1 year later the company went bankrupt and 350 people lost their job with no compensation. 

Might depend on what industry you work in, my wife took voluntary redundancy at 56 when her employer restructured and extended her job by 100% with no additional pay. (Not just her, they did that to a third of the people on her grade and demoted the rest)). She was working again (at a lower level of responsibility/pay, which was her choice) within 10 weeks and has never had any problem since, in our field (social care for younger adults) there’s a big shortage of skill and experience. So age is not a disadvantage.

I'd consider it, but then I'd be reasonably likely to get another job.

I think that is the key rider - almost nothing else matters (unless you have savings and a plan to travel the world or something).

What do you do?Are you thinking of moving? Does your partner have a good job?

Is it an area with a skills shortage and its relatively easy to find a new role.

What age are the children?

Is the company financially secure?

Can you pay off the mortgage?

I took it last year (semi-voluntary, offered myself up as a sacrifice after a merger) and am generally positive about the experience. I took a couple of months off which I enjoyed less than I thought I would (still net positive, just found having no structure harder than I realised) then used the remaining funds as a buffer to go contracting - something I have never done before but wanted to try.

I am fortunate to work in a very in-demand industry and have a decent network to find new roles but still I found the lack of certainty a bit daunting. I had enough savings and a frugal enough minimum standard of living that I could have gone for quite a while before the bailiffs started knocking. More specifically, I am 41 have a daughter who doesn't live with me (so child maintenance to pay) and a vast but cheap mortgage that I could cover for a while.

The main factor for me was that I hated working for the company after it got taken over which was damaging my mental health, I knew I had to get out sooner or later so getting paid to do so was a bonus.

I'm going to be vague as I must maintain confidentiality.

Engineering software development and maintenance. Partner is a part time teacher with health problems.

Hard to say post covid...

9 and 13, so they're still going to cost me a bit 🙂

Yes

It's a generous offer so I could part pay it off. As I mentioned i would be looking for a job or income from a start up. Not treating this as a jolly or early retirement.

This doesn't help your situation but seeing as you asked about other people's experiences. 

A guy working for one of my customers hit 65 and decided to retire, he apprenticed with the company so he had been there 50 years. 

His manager begged him to stay because they had a skills shortage. He agreed on 2 more years, 6 months in he got VR and walked away with 70k.

It's nice when the common working man gets a win. 

I took it from a software development job at 40 with 2 very small children. Got around a year's salary. The money was consumed in an unexpected way and so i didn't greatly benefit from it but i ended up in a much better job in the end. If you want to change job anyway or can use the money for something like paying your mortgage off consider it otherwise be cautious.

Even though I was quite confident about getting a new job it still made things stressful for quite a few months. 

Software Developers are in demand, at least in the South East anyway. I'd have thought you could start up as a contractor or get one of the thousands of active vacancies within a month or two. Nobody has mentioned the pension issue though. if you have a final salary pension scheme you may well want to stick with that. New positions these days rarely pay very much into pension. I didn't take redundancy but left when I couldn't take the politics anymore. Starting up as a contractor was pretty straightforward. Agents do all the leg work for you. Thought its not very nice being booted out when projects start to run out of money, and you won't be in a position of authority which some like/dislike.

It’s going to be tough in the jobs market unless you have an in demand skill. 
 

How much time have you left before you say yes or no?  Use it fast to weigh  up  jobs market for your skill and go looking actively . Even a couple of days hunting round and speaking to some recruiters may help you. 

It's normally quite hard moving jobs over 50 unless you are really special.  But these aren't normal times.  And look at all your liabilities...

So if you don't know the answer based on your specific situation, then given your situation, the default answer would be that you can't afford such a monumental gamble.

I did, at 35, but I had another job lined up and other factors in looking to move. I was lucky with the timing. I wouldn't have taken it otherwise at my age. I have known some people take it in their late 50s, already having maxed out their pension contributions and then being able to go contracting. It was win-win for them.

The only thing people haven't mentioned as far as I could tell is how you feel about your current job. Do you get on well there, with good job security and reasonable prospects of doing a job you find rewarding? Is the location ok? Or is there some other reason you are already looking for a move?

If there is no other reason to leave and if you definitely need to find another job then I think it comes down to a calculation of how long you might likely go without an income, whether that loss is outweighed by the package you get, and whether that monetary gain will outweigh the stress the process will no doubt put on you and your family. I guess also need to consider how mobile you are with two kids at school age and a wife in a presumably long term job.

Like others, I had the impression that software engineers were always in good demand, but you will know that better than us!

It very much depends on whether you believe that voluntary redundancy is likely to become compulsory if you don't take it. It is often offered as an enhanced package initially, then turning to compulsory on reduced/mandatory terms later on if the staffing levels haven't reduced enough. This way it is an easier sell to remaining staff, media and stakeholders - "we were able to reduce staffing costs by X through a series of voluntary redundancies" is an easier message to give than "we made X roles redundant". If the writing is on the wall, taking an enhanced voluntary package clearly makes more sense than hanging on too long.

However, check the T&Cs on any mortgage, loans, insurances etc as they may not pay out if you take voluntary rather than compulsory redundancy (I'm thinking of payment protection insurances in particular).

I took VR aged 43. It was a no brainer for me, I was on my own at the time, no kids, small mortgage and not enjoying the job. I fancied some time off but crucially I was confident I could find another job, (nuclear industry and at the time there was lots of hype surrounding a nuclear renaissance!)  So not much jeopardy really. I had two years off and went back to work so thankfully it worked out.

With a family though I appreciate things are very different. Good luck! 

I agree unless the poster is sat twiddling his thumbs doing nothing at work. 

I took VR from a job I hated, retrained and now do a job I like which is better paid. Can't say fairer than that.

Wife, two kids, mortgage. Nearly 20 years with the same firm (lovely family run business sold to clueless private equity outfit), took a crap statutory VR payout they were forced to offer us (they wanted to downgrade all the middle mangers jobs but didn't want anyone to leave). I was in a comfortable rut, bored out of my skull and totally unaware of just how miserable working a job I knew inside out was making me.

Left at 47, retrained in something completely different, finished training and started in my new job at 50. I'm the happiest I've been in years. Learning new things, doing challenging stuff, getting right out of my comfort zone; it's given me a new lease of life. 

Edit: Oh, and 18 months after I left the firm went bust. The safe option isn't necessarily safe

Juts a thought on software devs.

In Feb a bunch of our developers left because of changes to IR35 and having to work for an umbrella company. The same thing happened in many other industries, where contractors thought the grass was greener. Then covid hit. We're not recruiting and don't expect to do so for a while. There are a fair few contractors who left voluntarily, who are still looking for similar positions or have been forced to take lower positions.

It would seem to be a perfect storm in some industries. Lots of people looking for work, with very few jobs about. Check out the recruitment situation, chat with agents, sign up to news letters, apply for roles. It may work out well, what with home working being the norm, allowing you to work in places you couldn't commute to.

Worked for me. Employer offered a year's salary for voluntary redundancies, so I read that as "I bet you a year's salary you can't get another job".

I had two kids and a mortgage at the time, but I was confident. I got my application agreed, then the employer realised all the people who could get another job (i.e. good ones) had applied, and all the people who didn't rate their chances (bad ones) didn't apply. Net result, lose all the best people. They then withdrew the offer, but I had a signed agreement, and with my union's help, I fought it and won. Left the job in July, got a new one at better pay and conditions at a rival company, within two weeks. Result!

I was very lucky, in the right place at the right time.

I had this several years ago. Our site was being closed down and I was asked to move to a different location. In between being told my options (move or VR) and having to make a final decision, I managed to find a new job locally. It was an easy decision, plus it meant I met my future wife.

I had a private pension at the time, so that wasn't impacted.

Back then, I was a software engineer and had no trouble finding and getting a new job.

I took VR in my 30's wlaked out with a small wad of money, straight into another job.

I didn't like where I was working and was looking around anyway, so win win for me.

Not sure what it would be like today20 years later with Covid lurking, but it would depend on how quickly you can get another job I suppose.

My friend was advised not to pay off his mortgage. Put it in savings and use the savings to continue to pay the mortgage and live off. You don’t know how long you’ll be unemployed for and if you’ve put it on part paying your mortgage you still have to eat and pay off what’s left. 

^^ This.  Your outgoings aren't likely to reduce anytime soon.  Drawing your pension early (actuarily reduced) probably isn't going to give you enough money to live on with 4 family members and a mortgage.  So it boils down to

How secure is your job, how easy can you find new work, will new work pay well enough, would new work result in an improved quality of life (e.g. shorter commute), would the benefit of redundancy payment outweigh the risks of needing a new job in the biggest economic downturn for many years.  I suspect most employers are shedding consultant/agency/temporary staff and implementing a recruitment freeze. If you get a new job are you going to succumb to 'last in, first out' in a year's time?  If there are compulsory redundancies at your present work in a year's time who is most likely to go, you or your colleagues? Are you expensive to employ compared to your younger / newer colleagues?

By mutual agreement I was almost 58 when I was made redundant. Financially it was one of the best things to happen to me but at the same time I was sad to leave as I had reached a point in my career where I was actually beginning to enjoy my work.

Al

I intend to get some financial advice. This is a really difficult decision!

The one big barrier I have to accepting the offer and taking the risk is that bloody mortgage. Indeed a debt until death. Maybe I'll have to think about moving too.

Good to know I might start enjoying my work in 4 years time!

Not quite the same thing. I worked for a large International Company who were 'cherry picking' redundancy candidates in the UK that were easier to get rid of I believe, because of poor protective legislation.

They forgot that a small group of us had been given written financial retention bonus promises, because we were deemed to be core employees, if we stayed with them for several more years. IF WE KEPT OUR MOUTHS SHUT ABOUT IT.  

I walked out with a P45 plus a settlement of the bonus promise. 

You can imagine the consternation it caused once word got out to all and sundry about selective bonus promises.

Good luck with whatever choice you make. I was lucky enough to find new employment. It does exist but possibly not immediately.

Just be wary of all these positive tales. Naturally where it has not worked out well for people who have taken vr they do not generally post bad news stories as it  can be looked on as a personal failure.I am sure you may have figured this out!

The big elephant in the room at the moment is the Covid recession and the jobs market.As an employer in an engineering business my view is that the market is going to be awash with people looking for jobs who have excellent but not unique skills. You only have to look at aerospace to figure this out.

If your companys business has been doing OK  in Covid then this is a positive sign for staying.