An IVA runs for five years, and a lot can change in that time. If you're worried about committing while your work situation is uncertain, this guide explains how an IVA adapts to redundancy, retraining and new jobs.
What happens to an IVA if you change career?
Changing jobs during an IVA is allowed and common. You need to tell your supervisor about the change, and your budget is reviewed to reflect your new income and costs. If you earn more, your payment may go up at the next annual review. If you earn less, it can be reduced. Either way, the important thing is to keep your supervisor informed rather than letting payments slip.
If there's a gap between jobs, a short payment break can usually be arranged. This normally extends the end date of your IVA by the length of the break.
Agency and temporary roles while you look
Taking agency or temporary work while you look for something permanent is sensible, and it won't cause problems with your IVA as long as you report it. Your payment may be set at a lower level until your income settles.
Redundancy pay and lump sums
Redundancy can arrive at any point during a five-year IVA. If you receive a redundancy payment:
- Tell your supervisor before you spend any of it.
- You'll normally be allowed to keep enough to cover essential costs for a period while you look for work.
- Some of the remainder may need to go into the IVA, depending on the terms of your proposal.
- If you're likely to be made redundant before your IVA starts, mention it. It may change which solution is right for you.
Retraining or starting a course
Many people in Redcar have retrained for new industries, from engineering and construction to care and logistics. Local colleges and training providers run courses across Teesside, some of them free for adults without certain qualifications. If you take a course during your IVA, reasonable course costs and a temporary drop in income can be built into your budget, but you'll need to agree this with your supervisor first. Adult learning loans or student finance for a course can't be included in an IVA and should be listed separately in your budget.
Pension age and early retirement after redundancy
Some older workers in Redcar who lost their jobs chose to take their pension early rather than retrain. If you're approaching pension age, think carefully before starting an IVA. A drop to pension income partway through could make your payments unaffordable, and some proposals include terms about pension lump sums that become available during the IVA. Get independent pension guidance, such as the free Pension Wise service for people aged 50 and over, before making decisions about your pension, and tell your adviser if you plan to retire within the next five years.
Starting a business during an IVA
It's possible to become self-employed during an IVA, and some people who've left large employers have gone on to set up as contractors or tradespeople. Tell your supervisor before you start. Your payments will be reviewed once your new income is known, and you shouldn't take on business credit of more than £500 without permission. Many new businesses take time to become profitable, so a reduced payment may be agreed for the early months.
Energy bills in older seaside homes
Older terraced and seafront properties in the town can be draughty and expensive to heat, especially through the winter, when wind off the North Sea makes a noticeable difference to bills. Your IVA budget should use your actual energy costs, not a national average, so it stays affordable. Gas and electricity arrears can usually be included in an IVA. If you're on a prepayment meter and part of every top-up is going towards arrears, that should stop once the debt is included.
Council tax with Redcar and Cleveland Borough Council
Redcar and Cleveland Borough Council covers Redcar itself, the villages of East Cleveland and towns like Guisborough, Saltburn and Eston. Council tax arrears owed to the council can usually be included in an IVA, but the current year's bill must be paid on time. If your income has dropped, apply for council tax reduction straight away rather than waiting until you're in arrears.
When an IVA isn't the right fit
If your future income is really unclear, a five-year commitment may not be wise yet. A Breathing Space gives up to 60 days of legal protection while you get advice. A Debt Management Plan is flexible and can be changed easily as your work changes. If your income is low and you rent, a Debt Relief Order may write off your debts in twelve months.
Help for Redcar and East Cleveland
We're based in Newcastle and handle enquiries by phone and email, so there's no need to travel. Send the form at the top of the page and choose a time to be contacted. The enquiry is free and you're under no obligation.
Free advice is also available from Citizens Advice Redcar and Cleveland and through MoneyHelper. Read what happens if an IVA runs into trouble to see how changes in circumstances are handled.
Questions about work changes and IVAs
Will an IVA stop me getting a job?
Most employers don't ask. A few roles, mainly in finance and law, may require you to declare it, and some may run credit checks. Construction, engineering and care roles rarely raise any issue.
I live in Saltburn or Guisborough. Is that covered?
Yes. Everywhere in Redcar and Cleveland is covered, along with the rest of England, Wales and Northern Ireland.
What if I'm offered a job abroad?
Speak to your supervisor before you go. Working abroad doesn't automatically end an IVA, but your payments and the practical arrangements will need to be agreed, including how you'll receive letters and attend reviews.