Rule · ERA 1996 s.162

The 20-year service cap

Statutory redundancy pay counts at most 20 years of continuous service. If you have 30 years, only your most recent 20 are calculated. The earlier years are simply ignored for the statutory figure.

Which 20 years count

The cap counts backwards from the date of termination. So a worker dismissed at age 60 after 30 years gets credit for ages 40-60, not 30-50. This usually maximises the payment, because the most recent years are also the most likely to fall in the 41+ band (1.5 weeks per year). Source: ERA 1996 s.162(3).

The maximum statutory payment in 2026/27

The cap defines the absolute statutory ceiling: 20 years × 1.5 weeks × £751 = £22,530. No one can receive more than £22,530 in statutory pay alone, however high their salary or however long their service.

Can the cap be circumvented?

Not by statute. An enhanced employer scheme can count more years, or remove the 20-year ceiling, or apply uncapped weekly pay. The cap binds only the statutory minimum, not what an employer voluntarily offers on top.