Statutory Redundancy Pay: Why Age Changes Your Multiplier (2026)
Statutory redundancy pay isn't a flat rate per year of service — it uses an age-banded multiplier that pays more for years worked over 41. Here's exactly how the calculation works.
The three age bands
Statutory redundancy pay is calculated using a formula that credits each complete year of continuous service with a different number of "weeks' pay" depending on the employee's age during that year:
| Age during that year of service | Multiplier per complete year |
|---|---|
| Under 22 | 0.5 week's pay |
| 22 to 40 | 1 week's pay |
| 41 and over | 1.5 weeks' pay |
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Open Redundancy Pay calculatorWhy the age matters year by year, not overall
This is the part most people get wrong: the multiplier isn't based on your age at the point you're made redundant — it's based on your age during each specific year of service being counted. Someone who worked from age 38 to age 46 (8 years of service) has:
| Years of service | Age band | Weeks credited |
|---|---|---|
| Years 1–3 (age 38–40) | 22–40 band | 3 x 1.0 = 3.0 weeks |
| Years 4–8 (age 41–45, turning 46) | 41+ band | 5 x 1.5 = 7.5 weeks |
| Total | 10.5 weeks |
This mixed calculation is a common source of confusion — and a common source of underpayment if an employer simply applies one flat multiplier across the whole period of service.
The 20-year cap
Only a maximum of 20 years of continuous service count towards statutory redundancy pay. If someone has worked for longer than 20 years, only the most recent 20 years are used in the calculation — meaning very long-serving employees don't get unlimited credit, but the most valuable years (the later ones, likely to fall in the 41+ band) are the ones counted.
The week's pay cap
A "week's pay" for redundancy purposes is not simply your actual weekly salary — it's capped at a maximum figure reviewed annually by the government.
| Tax year | Weekly pay cap |
|---|---|
| 2026/27 | £751 |
Full worked example
Consider an employee made redundant at age 47, with 12 years of continuous service, earning £900/week (above the cap):
| Years of service | Age during those years | Multiplier | Weeks credited |
|---|---|---|---|
| Years 1–6 (age 35–40) | 22–40 band | 1.0 | 6.0 |
| Years 7–12 (age 41–46) | 41+ band | 1.5 | 9.0 |
| Total weeks credited | 15.0 |
Statutory redundancy pay = 15.0 weeks × £751 (capped week's pay) = £11,265.
Without the cap, at their actual £900/week salary, the same calculation would have produced £13,500 — a difference of £2,235 that the statutory cap removes.
Minimum qualifying service
Regardless of age, an employee needs at least 2 years of continuous service with the same employer to qualify for any statutory redundancy pay.
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Open Notice Period calculatorIs the age banding lawful?
Yes. Age-related pay differences are generally subject to age discrimination rules under the Equality Act 2010, but the statutory redundancy pay formula is written directly into the Employment Rights Act 1996 and is treated as objectively justified — recognising, among other policy reasons, that older long-serving employees may statistically find it harder to secure comparable new employment.
Practical tips
- Work out each year of service separately by age band rather than applying a single multiplier across your whole length of service.
- Check whether your employer's contractual (enhanced) redundancy scheme is more generous than the statutory minimum — many are, especially for well-paid or long-serving staff affected by the cap.
- Remember only the most recent 20 years count if your service is longer than that.
Use the redundancy pay calculator to run the exact age-banded calculation for your own length of service and salary.
Frequently asked questions
Why does age affect statutory redundancy pay?
Statutory redundancy pay uses an age-banded multiplier for each full year of service: 0.5 week's pay for years worked under age 22, 1 week's pay for years worked between 22 and 40, and 1.5 weeks' pay for years worked at 41 or over. Older employees with long service therefore receive a higher multiplier on those later years.
Is it age discrimination to pay older employees more redundancy pay?
No. The age-banded formula is written into statute (the Employment Rights Act 1996) and is specifically exempted from age discrimination rules as an objectively justified scheme, recognising that older long-serving employees may find it harder to find comparable new work.
How many years of service count towards statutory redundancy pay?
A maximum of 20 years of service counts, and only complete years of continuous employment are counted — so if you have 20+ years' service, only the most recent 20 years are used in the calculation.
Is there a cap on a week's pay for redundancy purposes?
Yes. A week's pay is capped at a maximum figure set by the government and reviewed annually (£751 from April 2026), regardless of your actual weekly earnings — so higher earners don't receive redundancy pay proportional to their full salary.
How is the age used in the calculation determined?
It's your age at the end of each complete year of service that's counted, not your age at the point of redundancy — so someone who turns 41 partway through their employment will have some years counted at the lower rate and some at the higher rate, depending on their age at each year's anniversary.
Do I need a minimum length of service to get statutory redundancy pay?
Yes. You need at least 2 years' continuous service with your employer to qualify for statutory redundancy pay, regardless of your age.
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