For most of the last few decades, a redundancy meant the employer was struggling, and the same role still existed somewhere else. The job search was about finding it. AI changes that assumption for some roles. When a task is being automated across a whole sector, the equivalent job elsewhere may be fewer, lower-paid, or gone. The money questions don't change much, but the answers to them can.
1. What's my real runway?
Start with the number that answers "how long do I have?" Accessible savings plus the payout, divided by essential monthly costs. Not current spending, essential costs: housing, bills, food, debt repayments, the things that don't stop.
That figure, in months, is your runway. It's the single most useful number in the first few weeks, because it turns a vague sense of pressure into a specific deadline you can plan against. It also tells you whether you have room to be selective about the next role, or whether speed matters more than fit.
If you want to see this for your own figures, the free redundancy runway calculator works it out in about 60 seconds. And if the question is whether the payout itself is enough, Is my redundancy payout enough? goes into that in more detail.
2. Is this a gap or a reset?
This is the question that makes an AI redundancy different. A gap is a pause between two similar jobs. A reset is a change of direction, often with retraining and a period of lower pay before income recovers.
A useful test: are equivalent roles still being advertised in similar numbers, at similar pay? If yes, you're probably planning for a gap. If the listings are thinning out, or the roles now ask for a different skill mix, it's worth planning for the possibility of a reset, even if you hope it's a gap. Planning for the longer version and finding the shorter one is a much better outcome than the reverse.
3. Can I afford to change direction?
If it does look like a reset, the cost isn't just a course fee. It's the income dip in the middle: the months of training or job-hunting, then a starting salary in the new field that may sit below where you were. The question isn't whether the new direction pays well eventually, it's whether your runway covers the bottom of the dip.
That's why the two numbers from the career change pay cut guide matter here too: your savings rate at a lower salary, and your runway if the change takes longer than planned.
4. What should I leave alone early on?
The first few weeks after a redundancy are when people are most likely to make big, hard-to-reverse money decisions under pressure: paying off a mortgage chunk, cashing in investments, committing to an expensive course. None of these are necessarily wrong. But they're easier to judge once you know your runway and whether you're facing a gap or a reset. A short pause to get the numbers straight usually costs nothing.
A couple of general points worth knowing about the payout itself, as the rules stand at the time of writing:
The first £30,000 of a genuine redundancy payment is usually tax-free. Pay in lieu of notice and holiday pay are taxed as normal earnings, so the cheque you receive isn't all treated the same way.
Pension contributions stop with the salary. It's easy to overlook that the employer contribution disappears too. That's worth factoring in if the gap runs long, rather than discovering it later.
Why this is more common than it feels
Being made redundant because of AI can feel like a personal verdict on your skills. The numbers say otherwise:
The pattern is wide, structural, and hitting experienced professionals, not only entry-level roles. That doesn't make it easier, but it does mean the decisions in front of you are ones a lot of people are working through at the same time.
This article is educational and does not constitute regulated financial advice. Figures such as the tax-free redundancy threshold and the survey statistics quoted reflect the general position at the time of writing and may change, they are not a personalised projection of your own position. Always consult a qualified financial adviser before making significant financial decisions.