# Would you opt for redundancy?



## paddyodoors (14 Sep 2009)

Age:  34
Spouse’s/Partner's age: 37

Annual gross income from employment or profession: 81k
Annual gross income of spouse: 72k

Type of employment: private sector 

In general are you: Saving

Rough estimate of value of home: 450k
Amount outstanding on your mortgage: 350k
*What interest rate are you paying? **Split as follows:*
*290k = ECB +.6  // 60k = ECB +1.1 (top up loan mid financial fall out) *

Other borrowings – car loans/personal loans etc None
Do you pay off your full credit card balance each month? Yes (usually) 

Savings and investments: Save 1-2k pm in high int deposit acc’s (FA regular saver etc), saving for house extension.  Current total Circa 65k

Do you have a pension scheme? Yes both have company plan 
AVCs – ME 20% Spouse 10%

Do you own any investment or other property?  No

Ages of children: 11 Months + 2 years 4 months – possibility of a 3rd in a year or 2

Life insurance: Covered via mortgage protection and work policies

*What specific question do you have or what issues are of concern to you? *

Whilst we earn a good wage currently, we both could potentially be made redundant by the turn of the year due to our respective company situations. I am in present company less that 2 years, spouse has 12 years (13y in March). I estimate roughly that the redundancies NET would be 15k and spouse 92k

I think it makes sense for my spouse to look for the redundancy with this potential large lump sum . We pay 1600 a month in childcare costs and she would prefer to work locally part time rather than commuting and working full time anyway

Obviously the part time role will probably take an age to find in the current environment and the base salary would be a fraction of what she earns now, but we can easily manage on one salary once you remove/reduce the childcare costs. 

Just wondering what people’s thoughts were on this, if my job was secure maybe this would make the decision easier/different? Appreciate your thoughts.

thanks Paddy


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## Guest116 (14 Sep 2009)

Are you saying that both companies are currently offering voluntary redundancy?


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## niceoneted (14 Sep 2009)

It would make sense for your wife to take redundancy if package was 92 K and with you planning to possibly have a third child and then to be able to cut back on childcare costs. 
It would also depend on what you will do with the 92 K. I would personally pay off the mortgage seeing as you have 65k in savings. 
Do you really need an extension? It is just that you will leave yourselves quite exposed with such a high mortgage especially if you lose your job - if not enough take redundancy in your place of work. 
What is take home pay like and how are your spending habits? Can you start learning to live with a smaller disposable income now so you are well prepared.


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## spursman (14 Sep 2009)

Do you pay off your full credit card balance each month? Yes (usually) 

not paying this off fully each month with your wages is crazy.


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## paddyodoors (14 Sep 2009)

aristotle25 said:


> Are you saying that both companies are currently offering voluntary redundancy?


 
No - its not volunatry, its just on the cards, and we can position ourselves to shown willingness.


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## paddyodoors (14 Sep 2009)

spursman said:


> Do you pay off your full credit card balance each month? Yes (usually)
> 
> not paying this off fully each month with your wages is crazy.


 
on the other hand, having flexibility when I need it is handy and on my wages I can afford it - that said, it is a rare scenario


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## Lightning (14 Sep 2009)

Where do you have the lump sum portion of your 65k of savings? 



niceoneted said:


> It would also depend on what you will do with the 92 K. I would personally pay off the mortgage seeing as you have 65k in savings.
> .



Given your circumstance, I would advise against paying off your mortgage. It is not in your financial best interest. 

The main mortgage is *1.60%* (ECB + 0.60%). 
You can get *3.80%* for a one year term deposit with Anglo or Irish Nationwide. 

Hence, even after DIRT, given your circumstances, it makes more sense to save than to pay off your mortgage.


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## paddyodoors (14 Sep 2009)

niceoneted said:


> It would make sense for your wife to take redundancy if package was 92 K and with you planning to possibly have a third child and then to be able to cut back on childcare costs.
> It would also depend on what you will do with the 92 K. I would personally pay off the mortgage seeing as you have 65k in savings.
> Do you really need an extension? It is just that you will leave yourselves quite exposed with such a high mortgage especially if you lose your job - if not enough take redundancy in your place of work.
> What is take home pay like and how are your spending habits? Can you start learning to live with a smaller disposable income now so you are well prepared.


 
Thanks Ted - well "need" is not how I would put it, "the desired goal" is a little closer . There is no rush or even absolute need for it, but would rather go ahead and sooner rather than later.

We are quite frugal and if you look at the savings, we arguably live with smaller disposable already. We could cut out the majority of the savings to a much smaller figure. 

I was thinking to pay off the top up - keep the excess as emergency and use the savings as planned - either for home extension of back up plan for if I get made redundant also.  

Paddy


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## Guest116 (14 Sep 2009)

paddyodoors said:


> No - its not volunatry, its just on the cards, and we can position ourselves to shown willingness.


 
As you are there less than 2 years are you confident you will get any redundancy at all if your role is made redundant? If it is not voluntary redundancy most companies wouldn't pay out anything.


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## paddyodoors (14 Sep 2009)

fungus said:


> Where do you have the lump sum portion of your 65k of savings?


 
Its with First active/Ulster. 

I did query that sometime ago and hence have it on deposit instead of paying off - it was marginally better to keep on deposit, not to mention handier having the cash to hand.

but good point 

cheers
Paddy


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## paddyodoors (14 Sep 2009)

aristotle25 said:


> As you are there less than 2 years are you confident you will get any redundancy at all if your role is made redundant? If it is not voluntary redundancy most companies wouldn't pay out anything.


 
Yes its 6 weeks per year pro-rated

Paddy


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## Guest116 (14 Sep 2009)

I think I would stick with the 81k job rather than taking 15k redundancy.


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## goingforgold (14 Sep 2009)

Wife should accept the 92K and run. You will then have 157K savings. Given that you already have two kids and are thinking about a third, it makes absolute sense to take that much money as a lump sum. Childcare costs for 3 kids will be very large. However you on the other hand should'nt dream about taking redundancy. As previous poster said 15K redundancy in exchange for an 81K salary is madness.


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## paddyodoors (16 Sep 2009)

For sure there is no question of me looking for redundancy.

The question here is would ppl think my spouse should considering my role could be obsolute also. 

92k isn't gonna go far if we are both unemployed and cannot get work again for the foreseeable future.


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## sadie (16 Sep 2009)

There is a lifestyle decision here as well. 

Life is for living at the end of the day. The sad thing is that children in full time childcare are only seeing their parents around 4 hours a day - smaller babies even less. 
The property 'boom' in this country has eroded family life (oh don't get me started). 
Take the redundancy if it's offered - let your children have the luxury of having their Mum around. The quality of life for everyone in your household will improve no end. It's worth making a few sacrifices for.

If your children could talk which option would they prefer - childcare/creche or at home with Mum?

You can well afford it. Plenty of people don't have that option as they need two incomes for the next 30 years to pay their mortgage.
Your wife can go back to work part time when they go to school, or re-train in the evening. So it's only for a few years that you'll need to manage on the one income. If you were both made redundant you can claim benefits and top up with savings until you get another job.


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## Lightning (17 Sep 2009)

paddyodoors said:


> Its with First active/Ulster.
> 
> I did query that sometime ago and hence have it on deposit instead of paying off - it was marginally better to keep on deposit, not to mention handier having the cash to hand.
> 
> ...



With such a large amount of savings it is significantly in your interest to switch. 

Ulster do not pay the highest rates at the moment. 

Have you checked out the savings best buys here?


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## paddyodoors (29 Sep 2009)

Just an update - I secured a new position in my company which therefore means I no longer have the redundacy threat, the seed has been sown in the other halfs mind and so she is day dreaming already about the part time role, so will happily take the redundancy if offered.

thanks 
Paddy


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## michaelm (30 Sep 2009)

She is day dreaming.  Being home with the kids is a full-time job.  Our single-income experience has been very positive (8 years now).  Our quality of life is much improved even though we have less money coming in.


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## kopq (30 Sep 2009)

paddyodoors said:


> We pay 1600 a month in childcare costs and she would prefer to *work locally part time* rather than commuting and working full time anyway


 
I don't think anyone's disputing the amount of work involved in childcare. The OP's wife would be taking on a part time job.


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## paddyodoors (1 Oct 2009)

kopq said:


> I don't think anyone's disputing the amount of work involved in childcare. The OP's wife would be taking on a part time job.


 
Well put - thanks.


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## niceoneted (1 Oct 2009)

That's great news paddy. I think it is the better option alright for your wife to take the redundancy given the amount involved and saving on child care. as another poster said they are having a very positive experience with the single income. Keep us posted on how your wife gets on.


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