Redundancy pay, notice periods and settlement agreements: the three figures a UK employment ends on

How to get to a number you can check

1. Compute the statutory redundancy payment. Split your service into the age bands, cap it at 20 years, and multiply by a week's pay capped at 751 pounds for a redundancy on or after 6 April 2026. The statutory maximum is 22,530 pounds. Everything an employer offers above that is an enhancement, not the entitlement.
2. Compute the notice separately. Statutory notice is one week under two years of service, one week per year between two and twelve, and twelve weeks at twelve years or more, or the contract where it is longer. It is separate money from the redundancy payment and it uses a different averaging window.
3. Apportion before you look at the tax. The notice element is taxed as earnings whatever it is called. Other termination money is charged only to the extent the aggregate exceeds the 30,000 pound threshold. Two offers with the same headline are worth different amounts once they are apportioned.
4. Check the agreement against the statutory conditions. A settlement agreement is void as a waiver of your statutory claims unless it is in writing, relates to particular proceedings, names an insured relevant independent adviser who advised you, and states that the conditions are satisfied.

The redundancy payment is a formula, not an offer

GOV.UK sets out the entitlement in three lines: half a week's pay for each full year you were under 22, one week's pay for each full year you were 22 or older but under 41, and one and a half week's pay for each full year you were 41 or older, with length of service capped at 20 years. Section 162 of the Employment Rights Act 1996 is the same rule in statutory form.

Two caps decide the ceiling. For a redundancy on or after 6 April 2026, GOV.UK puts the weekly pay cap at 751 pounds and the maximum statutory redundancy payment at 22,530 pounds. The qualifying period is two years, the week's pay is an average over the 12 weeks before notice, and the deadline to claim is six months from the date the job ends.

Notice is separate money and a separate calculation

Section 86 of the Employment Rights Act 1996 requires an employer to give not less than one week's notice under two years of continuous employment, not less than one week for each year between two and twelve years, and not less than twelve weeks at twelve years or more. An employee employed for a month or more owes one week, whatever their service.

GOV.UK says that as well as statutory redundancy pay the employer should either pay you through the notice period or pay you in lieu of it, and that notice pay is based on the average earned per week over the 12 weeks before the notice period starts. That window is not the same one the redundancy calculation uses, which is why the two figures can look inconsistent when they are both right.

The agreement is a statutory instrument with conditions

Section 203(1) of the Employment Rights Act 1996 makes void any provision purporting to stop somebody bringing proceedings under the Act. A settlement agreement escapes that only by meeting the conditions in section 203(3), one of which is advice from a relevant independent adviser on the terms and effect of the agreement and in particular its effect on the ability to pursue rights before an employment tribunal.

That is why the employer usually pays for the advice: the certainty it is buying does not exist without it. Acas adds the practical trap: an agreement would not be valid if it stated that it is in full and final settlement of all claims, because the agreement has to relate to the particular complaints it settles.

What this section does not do

It does not give legal advice, does not tell anyone whether to sign, does not value a claim on somebody's own facts, does not act for anyone and holds no client money. It publishes the statutory rules, shows the arithmetic they produce, and passes an enquiry to an authorised firm as an introducer.

Two numbers here can harm a reader if they are stale, and both are dated on the page that carries them: the statutory cap on a week's pay, which is changed by order and moves every redundancy figure with it, and the deadline for a claim. Where a source publishes no figure, this section records that it publishes none rather than estimating one.

Common questions

How much redundancy pay am I entitled to?

Half a week's pay for each full year under 22, one week for each full year from 22 to 40 and one and a half weeks for each full year from 41, with service capped at 20 years and a week's pay capped at 751 pounds for a redundancy on or after 6 April 2026, to a statutory maximum of 22,530 pounds.

Is the notice period included in redundancy pay?

No. GOV.UK treats them as separate: as well as statutory redundancy pay, the employer should either pay you through your notice period or pay you in lieu of notice.

Do I have to take advice on a settlement agreement?

For the agreement to waive your statutory claims, yes. Section 203(3) requires advice from a relevant independent adviser who is insured and named in the agreement.

Does this site work out my entitlement or advise me?

It publishes the rules and the arithmetic with a source and a date for every figure. It does not advise on your circumstances and does not act for anyone; where you want that, it passes an enquiry to an authorised firm.

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