For option 1) you have a choice of waiting till the end of the year and based on your p60 you will get a tax refund OR you can fill in a p50 form and tell them you will not be working for the rest of the year and if they accept this (no reason not to) they will refund you sooner. I'm not sure what you mean exactly in option 2 but your welfare entitlements are based on the year previous to your claim so I don't think there will be a problem in benifits while waiting on a new job.