How to turn redundancy in your 50s into a fresh start

Redundancy in your 50s often arrives at a time when your priorities are already shifting. For many of my clients, their mortgage is nearly paid off, the kids have flown the nest, and over the years they’ve built up a mix of pensions, savings, and maybe even some shares.

Suddenly, there’s breathing space, and the freedom to stop and ask: “What do I want the next 10, 15, or 20 years to look like?”

For some, the answer is retirement. For others, it’s slowing down or doing something completely different: consulting, working part-time, volunteering, or starting a small business. The beauty of this stage in life is that there’s often more choice than people think.

If you’ve only just been made redundant, it can be tempting to act quickly, whether that’s jumping into the next job, dipping into your pension, or paying off debts in one go. But making big financial decisions too soon can sometimes do more harm than good.

Here are five first steps I recommend, helping you stay calm, clear-headed and in control at this time:

Many people I speak to haven’t been made redundant, but they have been offered voluntary redundancy and are unsure whether to take it.

If that’s your situation, I’d urge you to get financial advice before deciding. It might feel tempting, especially if you’re burned out or craving change, but you need to know if it stacks up financially.

Will the payout cover your costs? What happens to your pension? How close are you to retirement, and can you afford to stop working?

A good planner will model both scenarios: taking the offer versus staying in the role. That way, you’re making the choice based on your goals, not guesswork.

Voluntary redundancy can absolutely be the start of something positive, but only if it fits into a sustainable plan.

When someone comes to see me after redundancy, the first thing we do is talk about their lifestyle goals. Do they want to retire completely? Work part-time? Try something new?

From there, we model out a range of scenarios, including:

• Full or phased retirement – You might not need to work again, or you might choose to scale back gradually.
• A mini-retirement or sabbatical – Take a year or two off before returning to work.
• Lower-paid, fulfilling work – Shift from high-pressure roles to something with more meaning.
• Starting a business – Many clients use redundancy to fund a passion project or consultancy.

Even if full retirement is financially viable, many people still choose to work on their terms, doing something that feels rewarding. The important thing is this, you don’t need to follow a traditional path. You can create one that suits your life now.

If you’ve received a significant payout, it’s essential to structure it wisely. I often help clients:

• Make full use of the £30,000 tax-free allowance
• Salary sacrifice the excess into their pension to reduce income tax and national insurance
• Defer part of the payment into a new tax year, depending on timing and earnings

Even small adjustments can make a big difference.

One client came to me at age 50 after a long career in banking. She’d just received a redundancy offer of £90,000 and was weighing up her options. Returning to the corporate world didn’t appeal. What she really wanted was to do something that mattered, ideally in the third sector.

Her big question was, “Can I retire, or do I need to keep earning?”

She had five different workplace pensions and some savings, but no clear picture of whether they could support her goals.

Here’s what we did:

• Modelled several scenarios: full retirement, sabbatical, part-time work
• Accessed only the £30k tax-free portion of her payout as a cash payment
• Salary sacrificed the rest into her pension, reducing tax and boosting future income
• Consolidated her pensions into a single, efficient investment strategy
• Helped her take on a flexible, low-stress role with a much smaller salary
• Created a plan targeting retirement at 63, but left room to keep working if she chose to

The result was a clear, flexible plan showing how and when to draw on her assets tax-efficiently, without compromising her lifestyle. We review it annually to make sure she stays on track.

In the end, it wasn’t just about the money. It was about giving her the freedom to live a life that felt more meaningful and on her terms.

Redundancy, especially when you’re in your 50s, can leave you feeling adrift. You’re facing a lot of unknowns, but, with the right support, it can also be a powerful reset.

A tailored financial plan gives you more than just numbers. It helps you:

• Understand how much you really need to live the life you want
• Explore your options with clarity and confidence
• Build a long-term strategy that adapts as life changes

I’ve seen clients arrive feeling uncertain and leave with a renewed sense of purpose, often discovering they have more freedom and flexibility than they ever imagined.

Yes, but only partially. The first £30,000 is tax-free. Anything above this is typically taxed as income. However, you may be able to reduce your tax liability by salary sacrificing some of the payment into your pension or deferring payment into the next tax year.

You might be able to, but you need to consider all your assets, pensions, savings, and how much you’ll need to support your lifestyle. A financial planner can model different scenarios, including full or phased retirement, so you can make an informed decision.

It depends. Paying off your mortgage can bring peace of mind, but it might leave you cash poor or limit flexibility. It’s worth weighing this decision against your long-term goals and other financial commitments.

They remain yours, and you can usually access them from age 55 (57 from 2028). You may have several small pension pots, it can be beneficial to consolidate them into a single, well-structured plan.

Many people over 50 choose to return to work on their own terms, whether that’s consulting, starting a small business, or taking on a lower-stress role. A financial plan can help you ensure it’s financially viable.

Possibly. A ‘mini-retirement’ could be the breathing space you need to regroup. With a financial plan in place, you can explore time off without compromising your long-term security.

If you’re over 55, yes, but just because you can doesn’t mean you should. Drawing from your pension early could reduce your income in retirement. A planner can help you decide when and how to start drawing tax-efficiently.

Potentially. If you’re not planning to use the full amount right away, investing could help protect its value against inflation. But your risk tolerance, goals, and time horizon should guide this decision.

Yes, many people use redundancy as a launchpad into self-employment. It’s important to balance start-up funding with personal financial security, a planner can help you ring-fence funds for both.

You can certainly begin the process yourself, but a financial planner brings professional expertise, scenario modelling, and an objective eye. Especially after a major life event, expert advice can help turn uncertainty into clarity and confidence.