Your Redundancy Pay Rights in the UK: What You're Entitled To

Losing your job is never easy. But being made redundant often feels doubly disorienting — you're dealing with the emotional weight of it while simultaneously trying to work out whether you've been paid fairly, whether your employer followed the right process, and what you're actually owed. If that sounds familiar, you're not alone. Around 150,000 people are made redundant in the UK every quarter, and a significant number of them leave without fully understanding their entitlements.

Here's what the law says you're entitled to — and what to do if something doesn't add up.

Who Qualifies for Statutory Redundancy Pay?

Not everyone who is made redundant automatically receives a statutory redundancy payment. To qualify, you must:

• Be classed as an employee (not a worker or self-employed contractor)
• Have worked for your employer continuously for at least two years
• Have been genuinely made redundant — not dismissed for performance or misconduct

If you tick all three boxes, your employer is legally required to pay you statutory redundancy pay. There's no opt-out clause, and you cannot waive this right — even if you sign a settlement agreement, statutory redundancy pay must still be honoured unless it has genuinely already been paid.

How Much Are You Entitled To?

The amount you receive depends on three factors: your age, your length of service, and your weekly pay (capped at £700 per week as of April 2026).

The formula works as follows:

• Half a week's pay for each full year worked while under 22
• One week's pay for each full year worked between the ages of 22 and 40
• One and a half week's pay for each full year worked at age 41 or over

Only the last 20 years of service count towards the calculation.

Example: Sarah is 44 years old and has worked for her employer for eight years. She earns £900 per week, but the calculation uses the capped figure of £700.

• 2 years aged 41–44 × 1.5 = 3 weeks' pay
• 6 years aged 38–40 × 1 = 6 weeks' pay
• Total: 9 weeks × £700 = £6,300

The government provides an official redundancy pay calculator on GOV.UK — it takes about two minutes and gives you a precise figure. Use it before you accept any payment, particularly if your employer has presented you with a number without showing their working.

Enhanced Redundancy Pay

Some employers offer enhanced redundancy pay — a more generous package that goes beyond the statutory minimum. This is often set out in your employment contract or a collective agreement with a trade union.

If your contract mentions enhanced redundancy, your employer is obligated to honour it. Review your contract carefully, and if anything is ambiguous, speak to your HR department in writing so there's a paper trail.

What About Notice Pay and Holiday Pay?

Redundancy pay is separate from other payments you're owed when leaving. You're also entitled to:

• Notice pay — either your contractual notice period or the statutory minimum (one week per year of service, up to 12 weeks), whichever is greater
• Accrued holiday pay for any annual leave you haven't taken

Notice pay is taxable. Redundancy pay itself is tax-free up to £30,000 — anything above that threshold is subject to income tax and National Insurance in the usual way.

Was Your Redundancy Handled Fairly?

Even if you've been paid the correct amount, you may still have grounds for a claim if the process was handled improperly. Your employer must:

• Have a genuine reason for redundancy (closing a department, for example — not simply wanting to replace you with someone cheaper)
• Consult with you individually before a final decision is made
• Consider any suitable alternative roles within the organisation
• Use a fair selection process if multiple employees are at risk

If you were the only person made redundant and you suspect the real reason was something else — a protected characteristic, whistleblowing, or exercising a statutory right — this could constitute automatic unfair dismissal, which doesn't require two years of service to claim.

What to Do If You Think Something Is Wrong

Step 1: Raise a grievance internally. Put your concerns in writing to your employer as soon as possible. This creates a formal record and gives them the opportunity to correct any errors.

Step 2: Contact ACAS. The Advisory, Conciliation and Arbitration Service offers free and impartial advice. Before making a claim to an employment tribunal, you're required to notify ACAS first through their Early Conciliation scheme.

Step 3: Check the time limits. You have three months minus one day from the date of dismissal to submit a claim to an employment tribunal. Miss that window and you'll almost certainly lose the right to claim, regardless of how strong your case is.

Step 4: Get legal advice. Many employment solicitors offer a free initial consultation. If your case is straightforward, ACAS or Citizens Advice may be all you need. For more complex situations — particularly where enhanced pay or discrimination is involved — professional legal advice is worth pursuing.

Making Your Money Work After Redundancy

Once you know what you're owed and you've received it, the next priority is making that money last. If your redundancy payment is sitting in a current account, it's losing value in real terms. It's worth looking at high-interest savings accounts or cash ISAs — you can use a comparison site like QuidCompare to check current rates and find the best home for a lump sum, especially if you're not going to need it immediately.

If you're claiming Universal Credit in the interim, note that savings over £6,000 will affect how much you receive, and savings over £16,000 may disqualify you entirely — so understanding where your redundancy pay sits in that context matters.

The Bottom Line

Redundancy is unsettling, but the law is largely on your side. Know your entitlements, check the numbers carefully, and don't be afraid to push back if something doesn't look right. The two-year qualifying period and the three-month claims window are the two dates that matter most — keep them in mind from day one.