UK Redundancy Pay: New Statutory Caps for 2025
From 6 April 2025, the Employment Rights (Increase of Limits) Order 2025 introduces updated compensation limits for redundancy and other employment-related payments.
Key Changes:
- The weekly cap for statutory redundancy pay increases from £700 to £719.
- The maximum statutory redundancy pay an employee can receive rises to £21,570.
- The maximum compensatory award for unfair dismissal increases from £115,115 to £118,223, remaining the lower of either a year’s salary or the statutory limit.
- The minimum basic award for unfair dismissal due to health and safety, trade union, or employee representative reasons increases from £8,533 to £8,763.
- Statutory guarantee pay rises from £38 to £39 per day.
These new rates apply to redundancy dismissals and other employment tribunal awards where the effective date of termination falls on or after 6 April 2025. If the dismissal occurs before this date, the previous limits will still apply, regardless of when compensation is awarded.
Employers should ensure they update their redundancy calculations accordingly, while employees facing redundancy should be aware of their entitlements under these revised limits. If you are doing redundancy on mass try out our excel based redundancy calculator which will be sure to streamline this process.
