The £751 weekly pay cap
What the cap is, in one sentence
From 6 April 2026, statutory redundancy is calculated using a weekly pay figure no greater than £751 (ERA 1996 s.227). If you earn £1,200 a week gross, the calc still uses £751.
Why the cap exists
The cap is a deliberate Parliamentary choice to keep the statutory minimum predictable and to limit employer liability. It is not a definition of fair compensation. Many employers top up with enhanced schemes precisely because the statutory cap is below the typical UK median wage.
When the cap changes
The Secretary of State must review the cap each year and lay an Order under section 34 of the Employment Relations Act 1999. New rates take effect from 6 April. The September Retail Prices Index (RPI) figure drives the uprating (RPI is the index named in the statute, not CPI); in years where RPI is flat or negative the cap is sometimes frozen (it was frozen at £475 in 2015/16).
For 2026/27 the cap rose from £719 to £751, a 4.5% increase, made by the Employment Rights (Increase of Limits) Order 2026 (SI 2026/310). The full Order can be cross-checked against the GOV.UK statutory limits collection.
Other places the cap applies
The same s.227 cap applies to the basic award in unfair dismissal claims and to the protective award for failure to consult under TULRCA 1992 s.188. It does NOT apply to statutory notice pay (a week's pay for notice is uncapped; you get your actual weekly gross), nor to enhanced schemes that use uncapped pay.