Redundancy in the UK: up to £22,530, 12 weeks' notice and six months to claim

Redundancy is a dismissal that happens when an employer needs to reduce its workforce. The law gives you four things in that situation: redundancy pay, a notice period, a consultation, and time off to look for work. Here is each one, with the GOV.UK rules behind it.

Who is entitled to statutory redundancy pay?

Statutory redundancy pay goes to employees with two years or more of service with that employer. Under two years, there is no statutory payment at all, although an employer may run its own, more generous scheme.

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Three situations remove the entitlement even when the service is long enough: your employer offers to keep you on; your employer offers suitable alternative work and you turn it down without good reason; or you were dismissed for misconduct, which is not redundancy.

How is the amount calculated?

The sum is built from full years of service, and the rate depends on your age during each of those years:

— half a week's pay for each full year worked while under 22;
— one week's pay for each full year from 22 up to and including 40;
— one and a half weeks' pay for each full year from 41 onwards.

Length of service is capped at 20 years: thirty years in the same job still counts as twenty. Your weekly pay is the average you earned per week over the 12 weeks before the day you received your redundancy notice.

Is there a ceiling on the payment?

Yes, and it is worth knowing in advance because it cuts sharply into higher salaries. If you were made redundant on or after 6 April 2026, weekly pay in the calculation is capped at £751 and the maximum statutory redundancy payment is £22,530. For redundancies before 6 April 2026, both figures are lower.

The practical effect is simple: if you earn £1,200 a week, the calculation still uses £751.

How much notice must you be given?

Statutory minimum notice periods depend on length of service:

— at least one week if you have been employed between one month and two years;
— one week for each year of service if employed between two and 12 years;
— 12 weeks if employed for 12 years or more.

Your contract can offer more than the statutory minimum but never less. Through the notice period your employer must either pay you as normal or pay you in lieu of notice. With payment in lieu you receive all the basic pay you would have earned, plus extras such as pension contributions or private health cover if your contract includes them.

Does your employer have to consult you?

Yes. A consultation is your right, and it must cover why you are being made redundant and what alternatives existed. If the employer is making up to 19 redundancies, there are no fixed rules on how the consultation is run. At 20 or more at the same time, collective redundancy rules apply and the consultation happens with a representative — a trade union rep, or one elected by employees.

Collective consultation carries minimum timings. For 20 to 99 redundancies it must start at least 30 days before any dismissal takes effect; for 100 or more, at least 45 days. If your employer consults late or not at all, you can bring a claim to an employment tribunal.

Can you challenge being the one selected?

Selection must be fair — based, for example, on experience or capability to do the job. Choosing someone because of age, gender, disability or pregnancy is not allowed, and GOV.UK says plainly this could be classed as unfair dismissal. Free advice on such a case comes from Acas or Citizens Advice.

Is redundancy pay taxed?

Statutory redundancy pay under £30,000 is not taxable. But a termination payment usually has several parts — alongside redundancy pay it can include holiday pay, unpaid wages and company benefits such as bonuses. Tax and National Insurance depend on what the payment is made of, so the figure landing in your account may differ from what you expected.

How long do you have to claim?

Six months from the date your job ends. That is the window for applying for statutory redundancy pay, so the last working day is a date worth writing down immediately.

GOV.UK runs an official calculator that works out the amount from age, length of service and weekly pay. It is the sensible starting point, and the figure it produces is what you then compare against your employer's offer.