Millennials could be hit with a bill of around £5,000 on being made redundant, according to new analysis from Royal London.
While the research shows the majority of millennials say they are confident they could find a better job within 12 weeks of being made redundant, Royal London says this could still see them significantly out of pocket.
According to the firm, redundancy for a millennial man could require income or savings of anything from £4,300 to £7,000 to cover the job hunting period, while for a millennial woman that figure could range from £4,100 to £5,100 based on average earnings.
For a man in his 20s this works out as £361.02 per week for each week of their job hunt, once they hit their 30s the figure increases to £457.03. Comparatively for women the figures are £346.40 and £425.35. While some of the income may come from statutory redundancy pay, even the maximum entitlement of £479 for each year worked could leave a gap.
Many millennials have only a short-term commitment to their current role, with many staying in their first few jobs for just two to three years. Translated into statutory redundancy pay, that could leave someone with just £958 in statutory redundancy pay for two years in a role, or £1,437 for three years. This equates to around 30% of the amount required to cover the period while they are job hunting. People who have been in a role for less than two years are not entitled to statutory redundancy pay, although many may be entitled to benefits such as Jobseekers Allowance6 while they are job hunting.
Debbie Kennedy, head of protection at Royal London, said: “Redundancies are at the highest level for two years. It is vital even for those with seemingly secure jobs to plan for the unexpected and ensure they are protected. Many millennials will have been in roles for a relatively short amount of time and unfortunately this will impact the statutory redundancy pay they would be entitled to. We urge millennials to consider if they are redundancy ready.”
