Increase to Statutory Redundancy Pay

The current cap on a week’s pay for the purposes of calculating statutory redundancy pay is £350.

In his recent budget the Chancellor announced that this cap would increase to £380. It has not yet been confirmed when this increase will become effective, but it is possible that it may apply from October 2009.

This means the most that can be paid as a statutory redundancy payment will be £11,400 (up from £10,500). Of course, many employers have in place enhanced redundancy terms, and these can be paid without deduction provided that the total paid does not exceed £30,000.

The TUC had argued that the figure should be increased to £500, but this seems unlikely for the foreseeable future.