When redundancies are announced most organisations focus, understandably, on the emotional impact. But alongside shock, uncertainty and loss sits another powerful and often unspoken source of anxiety: money.
In a recent episode of the Redundancy Matters podcast, financial wellbeing expert Abby Birch joined me to explore the crucial link between financial wellbeing and redundancy -and what HR professionals can realistically and responsibly do to support employees during this time.
With over 25 years’ experience as a qualified financial adviser, Abby now specialises in workplace financial wellbeing, helping organisations build financial confidence and resilience. And as she shared, redundancy often represents a significant financial shock, even for those who appear secure.
Why Financial Wellbeing During Redundancy Matters
“Financial wellbeing is about feeling secure and in control,” Abby explained. “It’s about being able to deal with the unexpected and still feel confident about your financial future.”
Redundancy disrupts that sense of control almost overnight.
Even individuals who may have savings or enhanced redundancy payments can experience anxiety about what comes next. For others, particularly those with shorter service or limited financial buffers, the pressure can feel immediate and overwhelming.
As Abby highlighted during our conversation, money and mental health are “intrinsically linked.” When financial uncertainty increases so too can stress, sleeplessness and reduced confidence. During a redundancy consultation process, that added pressure can make it harder for people to think clearly, ask questions or engage constructively.
Financial Guidance vs Financial Advice: Staying Within Boundaries
One of the biggest concerns HR professionals have is where the line sits between offering support and stepping into regulated financial advice.
Abby drew a clear distinction.
“When I was a financial adviser, I would tell people what to do with their money,” she said. That’s advice. Guidance, by contrast, involves helping someone understand their options and directing them to credible resources – without telling them what decision to make.
This distinction matters.
HR should not:
- Recommend specific investments
- Review personal budgets
- Suggest how redundancy payments should be used
But HR absolutely can:
- Provide financial education
- Signpost trusted support services
- Normalise conversations about money worries
- Create a culture where it feels safe to ask questions
As Abby put it, “People don’t know what they don’t know.” Often, employees simply aren’t aware of the support available to them.
The Financial Shock of Redundancy
Redundancy doesn’t just remove income – it removes predictability.
Financial wellbeing is often described as one of the pillars of overall wellbeing, alongside physical, mental and social health. Without a sense of financial security, it becomes harder to feel stable in other areas of life.
During redundancy, employees may be worrying about:
- Paying rent or mortgage payments
- Supporting dependants
- Understanding tax implications
- Accessing benefits
- What happens if they don’t find another role quickly
These money worries during redundancy can quickly become overwhelming, especially if people feel embarrassed or unsure where to turn.
Recognising that this financial shock is normal is a powerful first step for HR leaders.
The Power of Signposting Redundancy Financial Support
If there’s one practical action HR can confidently take, it’s signposting.
“Sometimes helping is signposting rather than getting involved,” Abby reflected.
There are excellent, credible organisations that can provide financial guidance, debt advice and benefits support. Making these visible as part of the redundancy consultation process removes stigma and gives employees somewhere safe to go.
This might include:
- Government-backed money guidance services
- Redundancy and tax calculators
- Benefits eligibility tools
- Pension provider webinars
- Debt advice charities
- Employee Assistance Programmes
The key is clarity and visibility. Support that exists but isn’t communicated might as well not exist.
Here are some organisations Abby recommends offering as signposting:
MoneyHelper – easy to navigate information on most subjects and links to trustworthy resources
StepChange – debt advice charity, offering free and confidential debt advice
Citizens Advice – information on most subjects, including applying for food bank vouchers
EntitledTo – check on eligibility for benefits
Embedding Financial Wellbeing Into the Consultation Process
Financial wellbeing during redundancy shouldn’t be treated as an afterthought. It works best when it’s built into the process from the outset.
That might mean:
- Including financial wellbeing information in consultation communications
- Equipping managers with clear language around guidance vs advice
- Ensuring mental health first aiders understand the impact of financial stress
- Making it explicit that money concerns are valid and common
When employees feel able to say, “I’m worried about money,” without fear of judgement, it reduces isolation and shame.
And importantly, it reinforces trust.
As Abby observed, employees increasingly look to their employers for credible information and support around overall wellbeing. While the employer-employee relationship used to be largely transactional, expectations have shifted. Organisations are now seen as a trusted source of guidance, particularly during times of uncertainty.
A Human-Centred Approach to Financial Wellbeing and Redundancy
Redundancy is never easy. But how organisations manage the experience leaves a lasting impact – not only for those leaving, but for those who remain.
By acknowledging the financial impact, maintaining clear boundaries around advice and proactively signposting support, HR leaders can make a meaningful difference to employee financial wellbeing.
It isn’t about solving someone’s finances. It’s about reducing fear, increasing confidence and showing that people matter, even as they transition out of the organisation.
And that is what compassionate, people-first redundancy management looks like in practice.
Abby Birch is a financial wellbeing and money expert with over 25 years’ experience as a qualified financial adviser. She now works with organisations to improve financial confidence and resilience in the workplace.
You can connect with Abby on LinkedIn to learn more about her work.
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