The redundancy rules from April 2026 bring important updates for both employees and employers, particularly around statutory redundancy pay calculations and compliance risks.

While the core calculation method remains unchanged, there are key increases in statutory limits and major legal changes to redundancy consultation rules that could significantly impact payouts and employer costs.

In this guide, we explain:

• The new statutory redundancy pay limits for 2026

• Changes to the weekly pay cap

• New redundancy consultation penalties

• What it means for employees and HR teams

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Statutory Redundancy Pay in 2026 (UK)

Statutory redundancy pay is still calculated based on:

• Age

• Length of service (capped at 20 years)

• Weekly pay (subject to a statutory cap)

The formula remains:

• 0.5 week’s pay (under age 22)

• 1 week’s pay (age 22–40)

• 1.5 weeks’ pay (age 41+)

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Increase in Weekly Redundancy Pay Cap (April 2026)

One of the most important updates each year is the statutory weekly pay cap, which directly affects redundancy payouts.

• From April 2025: £719 per week

• From April 2026: Expected increase (new rate announced annually)

Although the exact 2026 figure is confirmed each year via the Employment Rights (Increase of Limits) Order, it is expected to increase above £719, reflecting inflation and wage growth.

👉 Why this matters:
Even if an employee earns £1,000+ per week, redundancy pay is still calculated using the capped amount.

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Maximum Statutory Redundancy Pay (2026)

Because redundancy pay is capped at:

• 20 years’ service

• Maximum 30 weeks’ pay

The maximum statutory redundancy payout also rises each year.

For reference:

• 2025 maximum: £21,570

• 2026 maximum: Expected to increase in line with the weekly cap

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Major Redundancy Rule Change: Protective Award Doubled

One of the biggest legal changes in April 2026 is not the pay itself — but the penalty for getting redundancy wrong.

What’s changed?

If an employer fails to properly consult on collective redundancies:

• Previous maximum penalty: 90 days’ pay

• New maximum (April 2026): 180 days’ pay

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What this means for employers

This is a major financial risk increase.

Employers must ensure:

• Proper consultation when making 20+ redundancies

• Correct timelines and employee communication

• Full compliance with collective redundancy rules

Failure to do so could double the compensation liability.

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Other Employment Law Changes Affecting Redundancy (April 2026)

While not directly part of redundancy pay, several wider employment law changes will affect redundancy planning.

1. Statutory Sick Pay Reform

• Paid from day one (no waiting period)

• Lower earnings threshold removed

This increases employer costs during restructuring periods.

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2. New Statutory Payment Rates

• Family-related statutory pay increases to £194.32/week

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3. Fair Work Agency Enforcement

A new enforcement body will increase scrutiny on:

• Wage compliance

• Employment rights

• Redundancy processes

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How to Calculate Redundancy Pay in 2026

To calculate statutory redundancy pay:

Step 1: Work out weekly pay

• Average over last 12 weeks

• Apply the statutory cap

Step 2: Apply age-based multiplier

Step 3: Multiply by years of service (max 20 years)

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Example (2026 scenario)

Age: 45

• Service: 10 years

• Weekly pay: £900

• Weekly cap: (assume ~£740–£750 range for 2026)

Calculation:

• 1.5 weeks × 10 years = 15 weeks

• 15 × £750 (capped) = £11,250 redundancy pay

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Key Takeaways for Employees

• Your redundancy pay may increase slightly in 2026 due to the higher weekly cap

• Payments remain tax-free up to £30,000

• The calculation method itself has not changed

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Key Takeaways for Employers

• Redundancy costs may rise due to:

  • Increased weekly cap

  • Higher statutory payments

• The biggest risk is non-compliance with consultation rules

• The doubling of protective awards is the most significant change in 2026

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Final Thoughts

The redundancy rule changes in April 2026 are less about changing how redundancy is calculated and more about:

• Increasing statutory limits

• Strengthening employee protections

• Raising the financial consequences of getting redundancy wrong

For employees, this means slightly higher payouts.

For employers, it means significantly higher compliance risk.