Redundancy – what you need to know
Being made redundant can knock your personal and financial plans off course. Understanding your rights and options can help you take practical steps to get back on track.
If you are made redundant, having a positive action plan can make a big difference to regaining control over your life and finances understanding your rights and options is equally important.
When a company makes an employee redundant, they are legally required to select that person in a fair way. If your employer doesn’t share their selection criteria with you, ask them to. Other important information that your employer should provide you with in writing includes:
- the reason for your redundancy
- details of how your employer will carry out the redundancy
- the timetable for your redundancy
- insight into how your redundancy pay (if applicable) will be calculated.
If your employer doesn’t provide this information, or you have more questions that haven’t been answered, speak to them directly. Having clear, open communication can make the process easier and less stressful.
In addition to accessing information about your redundancy, you also have the right to:
- a consultation with your employer to discuss your redundancy
- a move into a different job within the organisation (if possible)
- time off to help you search for a new job.
Calculating redundancy pay
If you’ve worked for your employer for longer than two years, you should be eligible for statutory redundancy pay for each year of service.
As at 2016, the rates are currently at:
- 0.5 weeks’ pay for each full year worked under the age of 22
- 1 week of pay for each full year worked between the ages of 22-41
- 1.5 weeks’ pay for each full year worked at the age of 41 or over.
Use the Government redundancy calculatorUse the government redundancy calculator (page opens in a new browser window) to check the most current rates.
The maximum length of service that can be included in this redundancy pay calculation is 20 years and the weekly pay is capped at £475 a week.
Some employers may offer enhanced or additional benefits. If you’re eligible for these, your employer will provide details in writing.
Employees with fewer than two years’ service don't qualify for statutory redundancy pay. However, some organisations may make allowances for these employees.
Your next steps
One of the first things you should do if you’re made redundant is contact your bank. To help you work out your next steps and start getting back on your feet, Lloyds Bank offers a Helping Hands service. Just visit your local branch, or call us on 0345 300 0000.
If you feel that you’ve been unfairly selected for redundancy, you can appeal to your employer. You should do this in writing, setting out your reasons.
If you feel that you’ve been treated unlawfully during the redundancy process, you may be able to fight your case through an employment tribunal by contacting the Advisory, Conciliation and Arbitration Service.Advisory, Conciliation and Arbitration Service website (page opens in a new browser window)
Where to find out more
The UK GovernmentFind out more about your redundancy rights (pages opens in a new window) website has helpful details about your redundancy rights.
The Government also provides a calculatorUse the government redundancy calculator (page opens in a new browser window) that can help you to work out your statutory redundancy pay.
If you face any financial challenges during redundancy, you can speak to the Citizens Advice BureauCitizens Advice Bureau website (Page opens in new browser window) for free guidance.
If you’re worried about getting into debt during redundancy, you can contact the National DebtlineNational debtline website ( page opens in a new browser window).
Important legal information
Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
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