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How To Calculate My Redundancy Package

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How To Calculate My Redundancy Package
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Whether you are entitled to redundancy pay and how much it will be, depends on how many years you have worked somewhere, your salary and your age. If you qualify you are guaranteed a minimum amount known as statutory redundancy which we’ll look at in more detail below.

You may be entitled to more depending on your organisation’s policies and whether you negotiated a redundancy deal before you started. So always double-check your employment contract. 

Who is entitled to statutory redundancy?

Not everybody can claim redundancy. You must have been an employee of the organisation making you redundant for at least two years and there must be a genuine need to make redundancies in your workplace.

Part-time employees can claim redundancy. As can someone who has been on a fixed-term contract for two years or more, or several shorter contracts that add up to two years

You can also claim statutory redundancy if you have been temporarily laid off for more than four weeks in a row, or more than six non-consecutive weeks in a 13 week period.

But there are some situations in which you are not entitled to statutory redundancy even if you have worked somewhere for more than two years, including:

  • Your employer offers to keep you on or find you suitable alternative work
  • You are self employed.  
  • You are a crown servant, police officer or in the armed forces. 
  • You are an apprentice who is not an employee at the end of your training. 
  • You are domestic staff working for your immediate family. 

Whatever your situation your employer must follow a fair redundancy process, which includes at least one individual meeting with you to discuss the process. In this meeting they should explain why they need to make redundancies, why they’re considering you, what other jobs are available and give you a chance to ask questions. 

Calculating your redundancy pay

You can work out exactly what statutory redundancy you should be paid on this government website

As we mentioned above the amount you receive will depend on your age, salary and length of service, as follows:

  • For each full year worked under the age of 22 you’ll receive half a week’s wages. 
  • For years worked between the ages of 22 and 41, you’ll receive one week’s wages.
  • And for years worked over 41 you’ll receive one and a half weeks’ wages.

At the moment, the length of service used in the calculation is capped at 20 years, while weekly pay is capped at £538. That means the maximum you could receive is £16,140. 

Currently all redundancy pay under £30,000 is tax free. But if you or your partner have savings of more than £16,000, including redundancy pay, you cannot claim Universal Credit

What else are you entitled to?

There is additional support available during and after redundancy. If you are being made redundant, you are entitled to take paid time off to look for another job as long as you have worked in your current role for more than two years.

During your redundancy, and for up to 13 weeks after, you can also use your local Job Centre’s  Rapid Response Service, which specialises in helping you get back into work or training as soon as possible. If you’re thinking of changing careers the National Careers Service can offer help and advice. 

Of course, losing your job often creates financial uncertainty. If you are worried about keeping up with your monthly outgoings, talk to a debt charity before you lose control of your financial situation. They’ll be able to give you free advice on budgeting and what your options are if you can’t afford to pay off any debts you have. 

For those lucky enough to receive a large redundancy payment it’s worth getting some independent advice on how best to use it.

Working with us

If you find it difficult to afford your mortgage repayments after being made redundant, selling your home quickly is one way to give yourself some financial breathing space. 

If you decide it’s the right move for you, we can help. We specialise in buying homes quickly, in just seven days if necessary, which means your costly repayments will soon stop. What’s more you’ll swiftly have the funds from your sale in your bank account.

And because we only buy using our own cash, we are never part of an unpredictable chain of housing transactions. That means you can rely on the completion date we agree on. 

We’re experienced at dealing sensitively with challenging home selling situations and aim to make the process as cost effective and stress free as possible. We instruct and pay for solicitors, and we don’t use estate agents which means you don’t have to pay their fees. 
If you want to discuss how we could help you, we’d be happy to chat so please get in touch

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