How do I manage my money after losing my job?

I’ve lost my job, what now?

Losing your job can be stressful and upsetting for lots of reasons. You might feel worried about the future and feel unsure what to do with your time. You might also wonder what to do about financial commitments like rent and bills.  

If this has happened to you, know that you’re not alone and we’re here to help. Being unemployed can be scary, but it’s also only temporary and it doesn’t make you any less valid as a person. There are lots of tips for job hunting and interview techniques here. 

We’ve teamed up with financial experts, Experian, to ease your money woes. Here’s a practical guide to coping with money after losing your job. 

Take action as soon as possible 

It is important to act now to get your finances under control. If it takes longer than you think to find a job, the delay could affect your finances and your credit report. 

If you have less money coming in, you might not be able to pay all your bills. If your drop in income was sudden or unexpected you may not have been able to budget for this.  

• You should check whether you have an insurance policy you can claim on (such as income-protection or payment-protection insurance). 
• You should also review any tax credits and benefits you currently get or may be entitled to. See the ‘Useful contacts’ section at the end of this guide for details of organisations that can help you do this. 
• As soon as you know you are going to lose your job, have to work part time or receive a lower income, contact any lenders you have credit with, such as the bank you have a credit card or loan with, and tell them about your new circumstances straight away. 

Don’t be afraid to tell your lenders you’ve lost your job 

Lenders won’t think less of you if you tell them your income has dropped. If you tell them about any change in your circumstances, and keep them up to date, they will actually see you as a responsible borrower. If you own your home, it’s most important to contact your mortgage lender.  

If you find it difficult to pay your mortgage in the future, you could lose your home. But if you let your mortgage lender know about your change in circumstances as soon as possible, they might be able to help. They don’t want to repossess your home and would much rather agree reduced payments or a payment holiday to help you out. 

The same is true for other lenders, including any credit card companies, banks or finance companies you have loans or other credit accounts with. They don’t want the expense of chasing you for payments, or, in extreme cases, taking you to court. They would much rather find a way of letting you pay less each month, or even freezing your repayments for a while until you find a new job. 

Get organised 

Lenders can only help you if you tell them about your circumstances. It’s important to act as soon as you think you may have difficulties. Don’t let things start to go wrong before you do anything.  

• Contact all the companies you have a credit account with – even if you think you can manage your repayments for a while. Start with your debts for the most important things, such as your mortgage or rent, fuel and council tax. 
• Get a copy of your credit report – this might help you remember all the lenders you need to contact. Your report will also help you to understand how your ability to get credit could be affected if you fell behind with any of your repayments.  
• Get advice – You can contact a citizens advice bureau, StepChange Debt Charity, National Debtline or Payplan. Contact details are given below. They can also help you get a free copy of your credit report. 

Why is all this so important? 

When you apply for a job or to rent a property, some employers and landlords will get your permission to check your credit report. Although they won’t see details of your credit accounts, they will see any court judgments and bankruptcies. So, if you let your finances get out of control it may affect your chance of getting a job or a new home in the future. 

Protect your credit history by letting your lenders know if you lose your job and find you have less money coming in. 

Some contacts you might find useful:

• Experian Customer Support Centre
• StepChange Debt Charity
• National Debtline
• Payplan Phone
• Money Advice Service
• Work Smart

If you need support with money

If you’re dealing with any of these issues and need support, know that you’re not alone and we’re here for you. Get in touch with The Mix’s team for free and confidential support.

For more information about money and tips for managing your finances, please visit The Mix’s money hub.

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