How to claim JSA

[NibblyPig]

Reading this, I'm staggered how close to the wind that people like to operate.

Maybe, they have only seen the good times?
I can assure you when the financial crisis hit, it was not pretty.
I'm glad I had a lot more than an 8K warchest then.

In that situation, the warchest isn't specific to contracting. Anybody in any profession, permie or not, would have required savings if they were made redundant or temporarily out of a job. How many months savings is enough? I think 6 months is enough to keep in reserve when it is possible to pay off debts accumulating interest. I don't think it's close to the wire. When it did hit it took me 6 months to get a job, but I had literally zero experience; it was my first job at the peak of the recession. I am far more qualified now, and my monthly mortgage payments are only slightly higher than my rent was back then. 6 months should be easily enough.

The other argument seems to be that you can put your money into savings at a higher interest rate than your compound mortgage rate. If you can do that, great. But I have to facepalm at the contradiction that you must have a huge war chest to mitigate risk while gambling your war chest on stocks and shares. I am pretty risk-averse so I am happy paying off my mortgage.

I'll crunch the numbers when the time comes but I suspect it will always be better to pull out money, even at the higher interest rate, and spend it, than it would be to sit on it for years and years. And if in the far future you suddenly need a lump sum dividend withdrawal, you will be shafted something fierce.

If I enjoy the contracting life enough to despise permieland and want to stick with it through thick and thin, I will probably keep more money in reserve to tide me through the cold jobless winters, but otherwise I'm gonna try and buy property.

At the end of the day we are high earners, we pay high tax and the only way not to pay it is to keep it locked away depreciating in value every day.

[northernladuk]

In that situation, the warchest isn't specific to contracting. Anybody in any profession, permie or not, would have required savings if they were made redundant or temporarily out of a job.

It is really compared to permies. Our contracts are guaranteed to end in anything from 3 months upwards. In a bad stint you could face being out of work 8 times in two years if you end up with only 3 months gigs. The risk of that happening to a permie are very much reduced. They also have redundancy to tide them over which we don't.

How many months savings is enough? I think 6 months is enough to keep in reserve when it is possible to pay off debts accumulating interest. I don't think it's close to the wire. When it did hit it took me 6 months to get a job, but I had literally zero experience; it was my first job at the peak of the recession. I am far more qualified now, and my monthly mortgage payments are only slightly higher than my rent was back then. 6 months should be easily enough.

6 months is fine, anything over that is more than comfortable and not hard to maintain once you are a couple of years in

The other argument seems to be that you can put your money into savings at a higher interest rate than your compound mortgage rate. If you can do that, great. But I have to facepalm at the contradiction that you must have a huge war chest to mitigate risk while gambling your war chest on stocks and shares. I am pretty risk-averse so I am happy paying off my mortgage.

I'd argue the opposite with the approach of stuffing the mortgage with only 8k behind you. That's the most risky option of starting contracting. Risk averse would be forgoing a few percent on the mortgage for the first 6months to a year to build the chest up so averting risk and THEN stuffing the mortgage.
I agree about playing stocks with the warchest and I'd be willing to bet there are only a few people that do and only with money above and beyond 6 months worth. We've had many many threads on how to invest the warchest and there just isn't an answer. Aldermore high savings account seems to be the best way. They are running at about 1.9% or something last time I checked. There is crowd funding to consider but they don't always return the 4-5% offered and so on.

I'll crunch the numbers when the time comes but I suspect it will always be better to pull out money, even at the higher interest rate, and spend it, than it would be to sit on it for years and years. And if in the far future you suddenly need a lump sum dividend withdrawal, you will be shafted something fierce.

If I enjoy the contracting life enough to despise permieland and want to stick with it through thick and thin, I will probably keep more money in reserve to tide me through the cold jobless winters, but otherwise I'm gonna try and buy property.

I think you'll find it's a close run thing but the fact a large majority of contractors don't do this speaks volumes. Also if it looks like most of us will be going permie in 16 months or so am thinking it won't be efficient to pull it out in the short term. One for your accountant and your personal circumstance IMO.

At the end of the day we are high earners, we pay high tax and the only way not to pay it is to keep it locked away depreciating in value every day.

You seem very confident in your attitude and approach to something you are new to which also flies in the face of convention. Do you not think you might actually have gotten something wrong here? The fact many experienced contractors do the opposite isn't a flag to you at all?

[darmstadt]

If any contractor can hand on heart declare they don't have 16k in both personal and business savings really should be re-thinking what they are doing.

Damn, what should I be doing then?

[fool]

In that situation, the warchest isn't specific to contracting. Anybody in any profession, permie or not, would have required savings if they were made redundant or temporarily out of a job. How many months savings is enough? I think 6 months is enough to keep in reserve when it is possible to pay off debts accumulating interest. I don't think it's close to the wire. When it did hit it took me 6 months to get a job, but I had literally zero experience; it was my first job at the peak of the recession. I am far more qualified now, and my monthly mortgage payments are only slightly higher than my rent was back then. 6 months should be easily enough.

The other argument seems to be that you can put your money into savings at a higher interest rate than your compound mortgage rate. If you can do that, great. But I have to facepalm at the contradiction that you must have a huge war chest to mitigate risk while gambling your war chest on stocks and shares. I am pretty risk-averse so I am happy paying off my mortgage.

I'll crunch the numbers when the time comes but I suspect it will always be better to pull out money, even at the higher interest rate, and spend it, than it would be to sit on it for years and years. And if in the far future you suddenly need a lump sum dividend withdrawal, you will be shafted something fierce.

If I enjoy the contracting life enough to despise permieland and want to stick with it through thick and thin, I will probably keep more money in reserve to tide me through the cold jobless winters, but otherwise I'm gonna try and buy property.

At the end of the day we are high earners, we pay high tax and the only way not to pay it is to keep it locked away depreciating in value every day.

I think I was the only one who suggested stocks and shares.

Over the longer term, picking a repsectable low fee index and then burying your head in the sand is probably about as much of a gamble as house prices going pop, leaving you in negative equity. You'd do well to completely understand said advice before you write it off but either way, all investments have the potential to go bad, even your house, thus the idea is you diversify such that any one market crashing shouldn't end you.

[NibblyPig]

You seem very confident in your attitude and approach to something you are new to which also flies in the face of convention. Do you not think you might actually have gotten something wrong here? The fact many experienced contractors do the opposite isn't a flag to you at all?

Aye, participating in threads like this give me a more rounded perspective, and I go back and double-check my figures when I'm defending myself so it sorta works out.

Half of what I am saying is speculation so I may change my mind in the future. It's good to hear what other people think though.

It will probably be much easier to decide when I actually hit the threshold and have a more accurate idea of how much everything will cost.

[MrMarkyMark]

In that situation, the warchest isn't specific to contracting. Anybody in any profession, permie or not, would have required savings if they were made redundant or temporarily out of a job. How many months savings is enough?

Permies might not have savings, however, hopefully they would have redundancy compensation to fall back on.
From personal experience, I try to aim to have at least a year in my warchest. I would consider 6 months to be the minimum, where I would feel comfortable.

Still horses for courses, I'm still here, contracting, 15 years later and have weathered a few "storms".

[northernladuk]

It will probably be much easier to decide when I actually hit the threshold and have a more accurate idea of how much everything will cost.

Yep, there will be a natural point where you will have more money than the threshold and then your tactic will change and personal preference may play a bigger part. In future years you will probably have more cash in the bank than the threshold in the first week of the year so again your approach can change. It's always evolving.

[northernladuk]

Damn, what should I be doing then?

Giving up the hookers and booze I'd say...

Either that or just turn the temperature down 2 degrees in Darmstadt towers.

[MrMarkyMark]

Giving up the hookers and booze I'd say.

"Giving up the hookers", sounds like he may have to become one .

[uk contractor]

Not my experience at all. No need to close company down all you need is a P45. Whether you choose to claim or not is up to you - not getting into that one again.

Never heard of them asking for bank statements etc. Obviously, you have to tell the truth on the forms - if you lie thats your lookout.

Sanctions? Never heard of that happening to anyone who actually makes an effort. I found the job centre pretty good to be honest. They know that you're looking and will leave you alone for the most part. They've got enough trouble with scrotes who dont want to work.

Yes after a few months they will want to review whats going on. But its all about getting you back into work.

They know that its pretty stupid to try and force you to work in tescos stacking shelves wen A) they can get someone more appropriate and B) they know that in time you'll sort yourself out anyway.

I never had any trouble off 99% of the jobcentre staff with stuff like this. I daresay eventually they might have started talking about alternatives but then I'd probably be thinking about it myself too!

End of the day though. If they say right take this job sweeping the car park at Asda or your benefits stop then its your decision as to what is best. Take the job or don't and carry on looking for a contract. Nothing lost.

In London this is the experience with DWP now you have been very lucky if its not your personal experience with them. You get 12 weeks of minimal hassle signing on then its sanctions & or take any job you can get even toilet cleaning (if you could even get it). Few people with an IT background will get anything outside IT as employers know you will run away from them as soon as you get another IT role.