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Redundancy and debt

What if I'm made redundant?

Being made redundant and losing your job can be very worrying, and in most cases means having to get by on a reduced income.

Find out what to do if you’ve lost your job or are facing redundancy

Whether you’ve received a redundancy payment or not, it's natural to worry about how your finances may be affected. So, if you're concerned about a change in your circumstances, this guide could help you to:


  • Understand what to do next
  • Take control of your situation
  • Get your finances back on track

What is redundancy?

Redundancy is when a person is dismissed from their job because their employer needs to reduce their workforce.

If you’re being made redundant, it’s important that you understand your rights and whether you’re being treated fairly.

If you’re worried about how to deal with your household bills or debts, or both, we can help.

worried woman reading paperwork

Worried about money because of redundancy?

Free, online advice and money guidance available now.

Get help now

I’ve been furloughed, will I be made redundant?

If you’ve been furloughed from work, it’s because your employers are taking steps to deal with the economic impact of coronavirus.

Companies can get support from the government, so workers can receive up to 80% of their wages while being furloughed.

Being furloughed doesn’t necessarily mean that you’re at extra risk of redundancy.


Read our furloughing guide for more information.

Should I pay off my debts with my redundancy money?

If you’ve received redundancy pay, we recommend you use it to pay for essential household bills only. This is because you don’t know how long it may take to find a new job.

Make sure you put your redundancy pay into a bank account where you do not owe money. If you don’t, the bank may take it to repay any money you owe them.

Find out more about how to pay off or reduce debts.

Should I take out more credit to pay my debts?

No, we’d advise against taking out more credit if you’ve been made redundant.

Although getting a credit card or loan or increasing your overdraft might seem like a good way to pay off some of your debts or cover your day-to-day living expenses, it’s only a short-term solution.

Taking out more credit when your income has reduced is likely to make your financial situation worse, especially if you’re unable to pay it back on time.

If you're worried about debts and being made redundant, take two minutes to answer a few simple questions, so we can understand the best way to help you.

StepChange clients

How will redundancy affect my existing debt solution?

If you're already a StepChange client and you've lost your job or are facing redundancy, please let us know as soon as possible. We'll give you advice tailored to your situation and tell you all of your options.

Get in touch to tell us about a change in your circumstances.

How will redundancy affect my DMP?

If you're on a debt management plan (DMP) and your income has reduced due to redundancy, we may need to adjust your monthly DMP payments or discuss other options to help you with your debts.

Find out more about how redundancy could affect your DMP.

worried woman reading paperwork

Worried about money because of redundancy?

Free, online advice and money guidance available now.

Get help now