The threat of economic down turn has been on the edge for a while now. Views differ as to whether we are still growing, receding or standing still. This view differs, probably, with the area of the economy that you're most exposed to. You may have heard about the two-speed economy, that manufacturers are struggling, while high streets are busy.

As we all find the high street a little easier to relate to, we're likely to still be feeling fairly comfortable. As we spend money on ticket items and commit to larger purchases, like buying a home, we should think about the possible threat of redundancy and take precautions.

You may not realise that anyone who took a mortgage after October 1995 will receive no help with their mortgage payments for 39 weeks (nine months). Thereafter, they will only get help with interest payments up to £100,000. Individuals with a working partner, or savings may not get help at all.

Nine months is a real long time to cover the payments with no regular income. If you do fall into arrears, it's possible your lender could take legal action before you receive any help from the government. 

1. Anyone who has not been handed a redundancy notice by their employer, should consider taking insurance against your mortgage payment. Plenty of insurers will offer cover on a stand-alone basis and cover normally costs between £4-£5 per £100 of cover.
2. You should check the policy for exclusions; some have periods of up to 120 days before cover commences. Others have less of a deferred period.
3. You should take a serious look at your monthly budget now. Highlight any unnecessary costs and identify any savings that can be made.
4. If the worst happens, you should explore all the benefits that are available to you. This is no time to let your pride get in the way. If you've paid taxes in the past, it's time to claim some of that back in the way of support.
5. You can take some encouragement from the statistics. They suggest that most people find another job within a year.
6. Consider re mortgaging right now, whilst you are able. Find a fixed, or discounted rate mortgage. Many lenders are offering money saving deals and will even cover your cost of switching.
7. Don't cancel insurance policies without taking advice. Some insurance's are more important than others and a list of priorities should be drawn up.

Redundancy is a real threat and something that's impossible to insure against once the letter's in your hand. Consider safeguarding yourself now, before it's too late. 

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