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How Much Statutory Redundancy Pay Will I Get?

By: Paul Geraghty - Updated: 1 Jul 2020 | comments*Discuss
Redundancy Statutory Redundancy Pay

Employees with more than two years of continuous service should receive a lump sum payment from their employer when they are made redundant. Your employer should provide you with a written statement, setting out how the calculation of your Statutory Redundancy Pay was made. But of course you should check it yourself.

There are three basic components which go into the calculation of Statutory Redundancy Pay : your weekly pay, your years of continuous service, and your age.

Statutory Redundancy Pay – Continuous Service

This is normally calculated from the beginning of your employment to the date on which your notice period should end. Some forms of extended absence, for example those relating to pregnancy or sickness, still count as part of your “continuous service”. Note that time spent on strike, however, does not.

Statutory Redundancy Pay – Weekly Pay

For the purposes of this calculation, your weekly pay is calculated as follows. If your weekly pay is a standard amount, that is the value used.

If your normal working hours are fixed but you sometimes work extra hours, your average hourly pay during the 12 preceding weeks is calculated and multiplied by your normal working hours.

If your working hours are not fixed and your pay is highly variable as a result, your average weekly pay for the previous 12 weeks is used.Note, that for the purposes of calculating Statutory Redundancy Pay, there is an upper limit on the weekly pay figure which is used. At the moment, the upper limit is £330, although you should check with the Department of Work and Pensions (DWP) to get the latest figure.

How Your Age Affects the Amount of Statutory Redundancy Pay You Will Get

The government believes that the experience of redundancy is less disruptive to the lives of young people than to older workers. Young people tend to find it easier to get new jobs quickly at approximately the same salary as before. Because of age discrimination in the workplace, this is more difficult for older workers.

The amount of statutory redundancy pay you will receive is affected by your age during the time you were working for your employer.

  • For each year of continuous service in which you were less than 22, you will get half of your basic weekly pay.
  • For each year of continuous service in which you were between 22 and 40, you will get your standard weekly pay.
  • For each year of continuous service in which you were over 41, you will get 1.5 times your standard weekly pay.

The maximum number of years which can be taken into account for the purpose of calculating Statutory Redundancy Pay is 20. From the two maximums of weekly pay and number of years, it follows that the maximum amount of Statutory Redundancy Pay can be calculated. Currently, this stands at around £10,000, although legislative changes and updates to the figures to take account of inflation means that this can change from year to year.

Statutory Redundancy Pay Entitlement – Conclusion

Always check your Statutory Redundancy Pay to make sure the company has given you the right amount. You can either do it yourself manually using the information presented above or use some of the online ready forms which are available.

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I have been employed with my company for 14 years, my first 10 years was full time and my last 4 years have been part time as I reached retirement age but chose to stay at work.They are now proposing redundancy and are offering me 14 years at part time hours is this correct ? I thought I should be entitled to 10 years at full time and 4 years at part time pay please advise. Many thanks Tony Byrne
Tony - 1-Jul-20 @ 9:34 PM
My former employer announced the closure of a number of outlets a few months ago, with all staff being made redundant between July and November, on an enhanced redundancy package consistent with what my employer had paid on previous redundancy rounds. I finished work two weeks ago and received my agreed redundancy, but have just found out that the staff in the branches that have not closed yet are going to get a higher redundancy payment because my former employer has changed it's enhancement policy partway through the redundancy round. My question is - can they do this?If all staff were notified of redundancy at the same time, shouldn't they all get the same redundancy calculation?It doesn't seem fair that the rules change halfway through the programme, with the payout being a lottery for staff depending on the timing of their branch closure. Any advice would be appreciated.
Nikkinoonoo - 23-Sep-18 @ 1:08 AM
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