Voluntary redundency with good lump sum or stay employed

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ciars

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Bit confused over what to do. So would appreciate any advice. I'll try and keep this concise but a lot of factors to consider.

My salary 70k
Wife 29k partime. Just recently went to a 4 day week.
Savings 26k
Wife Offered V.Redundency of 65k

Mortgage 410k (1400 a month after trs)
Creche 900€ a month
Ccards 1000€
No other loans.

Really confused as what to do. Initial plan was for my wife to leave her job. Max our savings and reduce the creche fee. Her current job doesn't really suit our family life style as she's often away. Intention for my wife to find a new job with regular hours and return to work after a few months off.

However given the current employment condition we are now thinking it may not be a great idea for her to leave her job. Even tho we could manage on my wage alone.

It's also our intention to buy our final 'forever after' home in the next 3 - 5 years. So we are also wondering would a bank favor two good jobs with continued savings hopefully up to 40k by that time or my wife hopefully gets employed again and we have large savings of 110k. Also if my wife continues to work we can maximize the amount we can save.

Any help or advice appreciated.

Thanks.

Any advice would be really appreciated.
 
I think in this economy 2 jobs are definitely better than one. It could well take 1+ years for your wife to find a new position. Your own job could also be at risk in this recession.
 
What type of employment is your wife in? If she took the redundancy do you think she would find something handy enough were she to go back to work in a couple of years?
You are on a good wage and when you work out the money you will be saving by your wife staying at home (creche fees, travel/work expenses) there may not be a huge difference in the money you have at the end of the month. Also your quality of life might improve greatly if your wife were at home. How realistic the prospect of the forever home is in the next couple of years could be hindered by many factors. You say you have a mortgage of 410k, are you in negative equity? Even with 2 jobs, moving house might not be an option so soon.
 
Remember you would also get your wife's tax credits if she wasn't working. That combined with the creche would be another saving. Even if it took her 2 years to get another job you'd be better off. Of course the real danger is that you'd lose your job too - can anyone say their job is really safe at the moment?
 
I would think about taking the 65k redundancy (is that tax free?), your wife would be loosing a 29k job which isn't a huge loss. I mean its not a very big salary to loose and she might find another similar job within a few months.

Plus, is there a chance she will be made redundant on statutory terms if she doesnt accept the package offered at the moment?
 
Thanks for the replies, as I expected recommendations for both sides. Its a tough decision.

To answer some of the questions.

My wife has worked in her current job for 9 years. Its voluntary redundancy, if she stayed her job would not be under threat in the future but the conditions she works in would be changed (pay freeze, extra conditions & duties etc...her roster would actually become worse.)

Her Job, although she loves it, since our baby arrived, has disrupted the family structure. Would DEFINITELY have a better family life if she didnt work there.

Id feel confident about her picking up another job. The intention is to stay off for a few months anbyhow. So If she didnt find anything for 6 -8 months it wouldnt be a strain. We could easily use 10k from lump sum to helkp with outgoings.

We are not in neg equity with our current house. Current Mrkt house value is about 460k - 480k

Im only in my current job 5 months. But I am in a sector thats increasing in business. When I moved jobs I have 4 other job offers on the table. So although I understand every industry isn't immune from 'the recession' Id be hopefull to find something else quickly if worse case scenario happened.

Maybe we need to sit down and do column A column B pros and cons type stuff. But no matter what theres aslways the increasing worry of unemplyment and how everything could efect our long term goal.
 
She's being offered 65K to leave a job paying 29K ??
When you take into account the tax free bit she can get and your increased credits and the unemployment benefit she can claim (after a few months) and the creche fees you save, then she is effectively getting almost 3 years salary upfront - without leaving the house and all that added bonding time with baby ...sounds like a recession busting deal to me!
 
I would do a list of all your monthly expenses and see exactly what your outgoings are per month. Then you will see what you can afford to do. If I was in your wifes position and was being offered redundancy and the figures added up then I would be only too happy to be at home with my child.
 
On the assumption that you feel your job is secure then, if I were you, I'd take the money and run for the hills, especially if she thinks she'll get another job if necessary. The loss of income wouldn't be huge given the transfer of tax credits, increase of cut-off point by €9k, home carers credit, and if you zeroed your crèche bill, travel and other related expenses. The improvement in the quality of life for your family could be marked.
 
A very generous redundancy offer. IMO she should take it - almost 3 years salary. How old is your child(ren) ? If i was in your shoes, i would go for it. You cant put a price on spending time with the kids especially if they are young.
 
Thanks again for the replies.

I know its a great offer and opportunity to get our savings up and increase family life.

We know its a great opportunity - but my wife staying at home long term is not what we both want. The intention is to go back working after 6-8 months.

The other concern is looking at the long term of being able to afford to build our final house in about 3 - 5 yrs time. I understand there are a lot of factors involved in this (current house market etc..) But just wanted to cover everything before making a life changing decision.

Thanks again for all the replies.
 
ciars said:
Thanks for the replies, as I expected recommendations for both sides. Its a tough decision.

To answer some of the questions.

My wife has worked in her current job for 9 years. Its voluntary redundancy, if she stayed her job would not be under threat in the future but the conditions she works in would be changed (pay freeze, extra conditions & duties etc...her roster would actually become worse.)

Her Job, although she loves it, since our baby arrived, has disrupted the family structure. Would DEFINITELY have a better family life if she didnt work there.

Id feel confident about her picking up another job. The intention is to stay off for a few months anbyhow. So If she didnt find anything for 6 -8 months it wouldnt be a strain. We could easily use 10k from lump sum to helkp with outgoings.

We are not in neg equity with our current house. Current Mrkt house value is about 460k - 480k

Im only in my current job 5 months. But I am in a sector thats increasing in business. When I moved jobs I have 4 other job offers on the table. So although I understand every industry isn't immune from 'the recession' Id be hopefull to find something else quickly if worse case scenario happened.

Maybe we need to sit down and do column A column B pros and cons type stuff. But no matter what theres aslways the increasing worry of unemplyment and how everything could efect our long term goal.
Click to expand...

Any chance you could tell us what sector you are in?


If you are really sure about your position then I would take the redundancy, financially your wife could afford not to get a job for 3 years and the real important thing is quality of life and that would improve so to be honest I think it is a no brainer.
 
This is a no brainer ,take the redundancy. With the normal reliefs and top slicing your wife will pay less than 10K tax on this amount. How long would it take your wife to save 55k from her 29k job ?
Your wife should consider some form of upskilling during her time off
 
I really don't understand what your rush is to move. If you are in a property that is worth 460- 480k in todays climate I am guessing that it is either a very good area/substantial house or both. This house moveseems to be very high on your list of priorities but unless you really have to move in 3 years then I would try to remove this from the equation at the moment. You are currently in a position that many people would give their right arm to be in! I think you need to take stock of what you have at the moment and not be focusing your life on wanting to buy a better house in 3-5 years, god knows what could happen in that time! If moving house is really paramount to your decisions and your wife leaving work is a risk factor affecting this (she may not get another job so handy....) then it puts a very different slant on things.
 
As a stay at home mother, I figure she'd be mad not to take it. A year's mortgage payments for you are a bit below 17k. How long would it take the two of you to save up 65k? If your child could choose which lifestyle would they prefer?
If you lost your job and she still kept hers, you wouldn't be able to exist on the 29k a year anyway. If you take the redundancy and bank a lump of it, it'd keep you all going for a couple of years if you did lose your job.
 
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