Redundancy is a word that can make anyone’s heart sink. For many mid-senior leaders in retail, it’s not just about the financial implications , it’s about identity, confidence, and the weight of family responsibility. Whether redundancy has already been announced, or you suspect it may be on the horizon, taking control of your financial planning is one of the most empowering steps you can make.

At Exhale Financial Planning, I’ve worked with retail professionals in exactly this position. The conversations often start with stress, uncertainty, and “what ifs.” But by breaking it down, we can create clarity.

Redundancy is not the end of the story.

It’s a chance to reset, plan, and put yourself in the strongest possible position for what comes next.

Here are our top 10 essentials you should consider if you’re facing redundancy.

1. Understand your redundancy package in detail

Redundancy packages can vary significantly depending on your length of service, seniority, and your employer’s specific scheme. Don’t assume. Get the facts in writing.

In the UK, statutory redundancy pay is based on your age, length of service (up to 20 years), and weekly pay (capped at a government-set amount). But many retailers enhance this, especially for longer-serving or senior employees. It’s also important to clarify whether you’ll be expected to work your notice period or whether you’ll receive pay in lieu.

Key things to check:

• Statutory vs. enhanced redundancy pay – many retailers go above the statutory minimum.
• Notice period – will you work it, or will it be paid in lieu?
• Accrued holiday pay – this can sometimes add up to a meaningful sum.
• Benefits during notice – health cover, staff discount, share schemes.

Why this matters: If you know exactly what’s coming in, you can map out cash flow for the next 6–12 months. Without clarity, you’re planning in the dark.

Action point: Request a full written breakdown of your redundancy package from HR and highlight anything you don’t fully understand.

2. Know the tax treatment

The first £30,000 of redundancy pay is usually tax-free in the UK. Anything above that is treated as income and taxed at your marginal rate. But timing and structure matter. If you receive the whole payout in one tax year, it could push you into the additional rate tax band.

For someone earning £80,000, an extra £50,000 in redundancy pay could result in a large slice being taxed at 60%.

This 60% rate isn’t an official tax band, but it happens because you start to lose your personal allowance (the first £12,570 of income you can earn tax-free) once your income exceeds £100,000. That loss means each extra £1 earned between £100,000 and £125,140 is effectively taxed at 60%.

Options to reduce this include:

• Salary sacrifice into pensions – diverting some of the taxable element into your pension can save tax and boost retirement savings.
• Negotiating payment timing – some employers will agree to split the payout across tax years.

Why this matters: Getting the tax treatment wrong can cost thousands unnecessarily.

Action point: Speak to a financial planner or tax adviser to run through different payout scenarios and how they affect your income tax.

3. Review your household budget

Redundancy often feels like an emergency, but a clear view of your spending is one of the most calming exercises you can do. Many mid-senior leaders in retail have high demands on their income: mortgages, children’s education, travel, and supporting wider family.

Start with the essentials. Your mortgage or rent, utilities, food, transport, children’s costs. Then list discretionary spending. Things like subscriptions, memberships, holidays, and luxury items. It’s not about cutting all joy out of life. It’s about knowing your baseline.

Example: A client of mine in her late 40s worked out that her core monthly spend was £5,000. She had assumed it was nearer £7,000. That difference gave her a huge sense of relief and confidence about how long her redundancy package would last.

Action point: Create a simple budget spreadsheet listing essential vs. discretionary spending. It gives instant clarity on where you stand.

4. Protect your financial freedom age

For many of my clients, the ultimate goal is financial freedom – the point where work becomes a choice. Redundancy can feel like it’s pushed that further away. But with careful planning, that’s not always true.

We can model whether redundancy delays, accelerates, or leaves unchanged your financial freedom age. For example, some clients have used part of their redundancy payout to make significant pension contributions, actually bringing forward financial freedom.

Conversely, pausing contributions for a period could mean retiring a few years later but knowing that trade-off helps you make a decision with confidence, not fear.

Action point: work with your financial planner to see the impact of redundancy on your financial freedom age.

5. Make pension choices wisely

Redundancy often raises pension questions. You may need to decide:

• What happens to contributions during your notice period?
• Do you transfer or consolidate pots once you leave?
• Could extra redundancy payments be used to make tax-efficient pension contributions?

Another important consideration: what happens in your next role. Pension contribution percentages vary widely between employers. One retailer may contribute 10% automatically, another only 3%. If your new scheme is less generous, you may want to increase your own contributions to avoid falling behind your retirement plan.

Why this matters: For UK retail leaders, pensions are often one of the largest assets you’ll ever own. Over decades, even a small drop in contribution rates can create a six-figure shortfall.

Action point: Contact your pension provider(s) to confirm what happens to your scheme after redundancy, and when starting a new role, review contribution levels against your retirement goals.

6. Explore protection options

When you leave an employer, certain benefits may stop, like death in service cover or income protection. These are often overlooked in the scramble of redundancy, but they’re essential if you have a family depending on you.

Questions to ask:

• Do you have life insurance outside of work, or was it only through your employer?
• If you had income protection, does your new role have it too?
• Is private health insurance linked to your job?

Replacing these privately can be more expensive, but the peace of mind is worth it. Knowing your family is financially secure if the worst happens is priceless.

Action point: Review your current protection cover and, if needed, get quotes for replacement life cover or income protection.

7. Build or replenish your emergency fund

An emergency fund is your financial shock absorber. Ideally, you want three to six months of essential expenses set aside in an accessible savings account. This prevents you from having to dip into investments at the wrong time.

Redundancy is the textbook example of why an emergency fund matters. If you don’t have one, this is the moment to create it. Using a portion of your redundancy payout for this purpose is a smart move.

Tip: Keep the money in a separate easy-access account, not your day-to-day current account. That way, it feels ringfenced and less tempting to spend. But don’t lock it away. It might as well be worthless if you can’t access it when needed.

Action point: Open or review your easy-access savings account and transfer part of your redundancy payment into it.

8. reassess career and life goals

Redundancy is often framed as loss, but it can also be opportunity. Many mid-senior leaders in retail tell me it’s the first time in years they’ve had the headspace to ask: What do I really want next?

This could mean pursuing another corporate leadership role, moving into consultancy, starting a business, retraining, or even semi-retirement. Your financial plan should flex around your career goals, not the other way around.

Example: One client decided to take 12 months out to retrain in a completely different sector. Because we’d planned redundancy carefully, they could do this without worrying about paying the bills.

Action point: Write down three possible next steps you’d like to explore – then test them against your financial plan.

9. Consider timing of investments

If you have investments, redundancy may leave you wondering whether to pause contributions or even sell assets. The key is to balance short-term cash flow with long-term growth.

Selling investments during a downturn can lock in losses – but maintaining contributions during redundancy might not be realistic either. Pausing for a defined period can be a sensible compromise.

A financial planner can help you decide which pots are best to use if you need extra cash – for example, drawing from ISAs before pensions, to avoid unnecessary tax.

Action point: Review your current investment contributions and decide whether to maintain, pause, or adjust them.

10. Seek advice early

Perhaps the most important essential: don’t go it alone. The UK financial landscape is complex, and redundancy adds layers of emotion that make clear decision-making harder.

A regulated financial planner can:

• Show you how redundancy affects your financial freedom age.
• Optimise tax on your payout.
• Ensure pensions and protections are aligned.
• Give you the permission – the reassurance – to know you’re making the right calls.

Why this matters: Financial planning is not just about numbers. It’s about giving you peace of mind, so you can focus on your next career step and your family.

Action point: Book an initial call with a regulated financial planner before making any big financial decisions.

Final thoughts

Facing redundancy in your 40s or 50s can feel overwhelming. But with the right planning, it doesn’t have to derail your future. In fact, it can be the moment you take control, align money with life, and move forward with confidence.

By breaking it down into essentials – from understanding your package, to optimising tax, to ensuring pensions and protections are aligned – you give yourself clarity and options. And that clarity is what reduces the fear and allows you to focus on what comes next.

For mid-senior retail leaders, your career has been demanding enough. The last thing you need is more financial stress. Partnering with an expert gives you clarity, options, and the space to breathe.

Redundancy may not be a choice. But how you respond to it – and the financial foundation you build – absolutely is.

Exhale Financial Planning – helping retail leaders breathe easy about money, no matter what comes next.

Please note: The content of this guide is intended for general information purposes only, which is not intended to address your particular circumstances.

Category: Redundancy