Redundancy Pay in 2026: Your Rights and How Much You're Owed
Being told your role is at risk is stressful enough without also having to work out whether your employer is offering you the right amount. Here's exactly what you're entitled to under the 2026 rules.
title: "Redundancy Pay in 2026: Your Rights and How Much You're Owed" category: Work & Income date: 2026-07-09 tags: [redundancy, employment-rights, statutory-pay] image: https://picsum.photos/seed/redundancy-pay-2026/2400/1350
Being told your role is at risk is stressful enough without also having to work out whether your employer is offering you the right amount. Here's exactly what you're entitled to under the 2026 rules.
The updated statutory cap
If you're made redundant on or after 6 April 2026, your weekly pay for redundancy calculation purposes is capped at £751, and the maximum statutory redundancy pay available is £22,530 — up from a cap of £719 the previous year. This cap matters because even high earners' statutory redundancy pay is calculated using this ceiling, not their actual salary, once it exceeds the threshold.
Who qualifies
You'll normally qualify for statutory redundancy pay if you're an employee (not self-employed or genuinely freelance), you've been continuously employed for at least two years, and you're being dismissed specifically by reason of redundancy rather than performance or conduct.
How it's calculated
Your statutory redundancy pay is the number of "qualifying weeks" — based on age and length of service, capped at 20 years — multiplied by the lower of your average weekly pay or £751. The formula bands by age: half a week's pay for each full year under 22, one week's pay for each full year between 22 and 40, and one and a half week's pay for each full year 41 and over. Many employers offer more generous "enhanced" redundancy packages on top of the statutory minimum, particularly for longer-serving staff — always check your contract and any collective agreement, since the statutory figure is a floor, not a ceiling.
Checklist: if you've been told you're at risk
- Confirm your continuous service date — check your original start date and any breaks in employment, since under two years typically means no statutory entitlement (unless your contract offers more).
- Ask HR for the calculation basis — your average weekly pay, years of service, and age band should all be stated clearly.
- Check your contract for enhanced redundancy terms — many employers pay more than the statutory minimum.
- Remember the tax treatment — up to £30,000 of redundancy pay is tax-free, though any pay in lieu of notice above that may be taxed differently.
- Check consultation requirements were followed if 20 or more roles are affected at one site — collective consultation rules apply, and failures can be costly for employers.
- Get independent advice from Acas or a solicitor if anything about the process feels rushed or the numbers don't add up.
A costlier mistake for employers in 2026
Employers should note that the maximum protective award for failing to properly consult on collective redundancies has doubled from 90 to 180 days' pay per affected employee under the Employment Rights Act 2025 changes — a significant increase in financial exposure for businesses that cut corners on the consultation process during larger restructures.
How the UK compares internationally
The UK's statutory redundancy scheme is relatively modest by Western European standards — France and Germany both mandate more generous statutory severance formulas tied more closely to final salary with fewer caps. The US has no federal statutory redundancy pay requirement at all; severance there is typically discretionary and set by company policy or individual negotiation, meaning UK employees have materially stronger legal minimum protections than their American counterparts. Australia's National Employment Standards provide a redundancy pay scale broadly similar in structure to the UK's, using weeks of pay per year of service, though calculated without the same overall statutory pay cap.
Key Numbers
- £751 — capped weekly pay for redundancy calculations (from 6 April 2026)
- £22,530 — maximum statutory redundancy pay available
- 2 years — minimum continuous service required to qualify
- £30,000 — tax-free threshold for redundancy payments
- 180 days — new maximum protective award per employee for consultation failures (up from 90)
Sources
- UK Redundancy Pay 2026: Calculated, Rates & Eligibility — Davidson Morris
- Redundancy pay — Your rights during redundancy — Acas
- UK Employment Rights Act 2025 – April 2026 Changes — Akin
- Redundancy: your rights: Statutory redundancy pay — GOV.UK
Educational content only — not financial advice.