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Career Change · UK 2026

How do I handle being made redundant in the UK?

Alex By Alex · 12-year UK recruiter · Updated April 2026

Know your statutory entitlement first. UK statutory redundancy: half a week's pay per year of service under 22, one week per year 22-40, 1.5 weeks per year 41+, capped at £700/week (2024 rate) and 20 years. Maximum statutory payment around £21,000. This is the floor, not the offer.

What's negotiable. Ex-gratia (above-statutory) payments — usually negotiable upward 10-25% on first offer. Notice period payment — sometimes payable in lieu (taxable) or worked. Outplacement spec — push for named provider with specific hours, not generic 'support'. Reference letter — get the wording in writing before you sign.

The £30,000 tax-free rule. The first £30,000 of a genuine ex-gratia termination payment is tax-free. PILON (pay in lieu of notice), bonus, and any contractual entitlement above £30k are taxed normally. Maximise the ex-gratia portion within the £30k cap.

Timing the move. Once you've signed the settlement, you have 8-16 weeks of paid notice typically. That's your job-search runway. UK candidates with announced redundancy often interview faster than expected because employers respect the directness — 'I'm being made redundant in [month]' is honest, time-pressed, and gets recruiters moving.

Mental wellbeing matters. Redundancy is psychologically harder than candidates expect, even when the financial side is decent. The first 2-4 weeks are usually the worst. Build a structure: morning routine, daily job-search hours, weekly check-ins with friends. Use any therapy benefit your settlement includes.

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