Savings Affect on Income-Based JSA / Avoiding Penalties

Hi All,

I'm currently under the threat of redundancy so I am looking into my options should I become Unemployed.

I have worked in my current job for 5 years and as I understand it, I will be elligible for Contribution Based Job Seekers Allowance for 6 months with any savings or redundancy payments being irrelevant to myself being eligible.

If I am still unemployed after the six months I go onto Income Based JSA which does take into consideration any money I have in the bank. I believe the figures are that if a claimant has over £16,000 he gets nothing and if he has less than £6,000K he gets the full benefit. Presumably any savings between 6k and 16k will mean a sliding scale of benefit reduction up to nothing at 16K.

I expect to get about 9K in redundancy, so it's possible that I'll have above £6K after six months if I budget wisely.

Does redundancy payments count as savings?
Is it better to spend all but 6K before going onto Income Based JSA?
Is deliberately spending the cash just to get below 6K savings allowed?
Would overpaying the mortgage be an acceptable use for the savings?
How much does the savings reduce the benefits paid?

Any Help would be appreciated! Thanks,
Mr O