Annual Increase to Statutory Rates

Angela Renwick
Associate
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The Government has announced the normal inflationary increases to various statutory rates of pay in the Employment Rights (Increase of Limits) Order 2026, which come into force on 6 April 2026. 

The most notable increases that you should be aware of are as follows:

Redundancy pay

• The cap on a week’s pay for a statutory redundancy pay calculation will increase from £719 to £751.

Compensatory award for unfair dismissal

• The limit on this award for loss of earnings will increase from £118,223 to £123,543. For people who earn less than £123,543, the limit will continue to be 52 weeks’ gross pay.

Compensatory award for failure to allocate and pay tips fairly

• The limit will increase from £5,135 to £5,366.

Statutory guarantee payment

• The statutory guarantee payment will increase from £39 a day to £41 a day. This is payable for the first five days of any period of lay-off.

The full list of changes can be found here. 

As a reminder, the Government also previously announced that with effect from 1 April 2026, the following increases to minimum wage will come into effect:

• National Living Wage (21 and over) – £12.71
• 18-20 year old rate – £10.85
• 16-17 year old rate – £8.00
• Apprentice rate – £8.00

If you have any questions about how these increases may affect your business or organisation, or if we can provide support or assistance on any other employment law matter, please do not hesitate to contact a member of the team on 0141 331 5150.

Topics: Compensation, Employment Tribunal, National Minimum Wage, Redundancy, Redundancy Pay, Statutory Payments, Statutory Redundancy Pay, Unfair Dismissal