What to Do If You’re Made Redundant in 2026
Quick answer: Don’t panic. Check your redundancy pay entitlement, claim Universal Credit or New Style JSA as soon as possible (don’t wait), review your outgoings immediately, and start your job search in parallel. Most people find new work within a few months — and 2026’s job market, while difficult, is still hiring in key areas. Here’s everything you need to do, step by step.
The Reality of Redundancy in 2026
If you’ve just been made redundant, you’re far from alone. According to data obtained by Liquidation Centre through a Freedom of Information request to the Insolvency Service, up to 327,000 redundancies are forecast in 2026 — a 3.7% increase on 2025, which was already the worst year for job losses since the pandemic. In February 2026 alone, 430 employers filed HR1 advance redundancy notices — almost exactly matching February 2009, at the height of the financial crisis.
The causes are well-documented: rising employer National Insurance contributions, cost pressures across every sector, global trade uncertainty, and the growing influence of AI on workforce decisions. It’s a tough backdrop. But redundancy is also a normal, survivable life event — and people who handle the practicalities calmly tend to get back on their feet much faster than those who freeze.
This guide covers everything from your legal rights to claiming benefits to getting back into work.
Step 1: Know Your Rights — and What You’re Owed
Before anything else, make sure you understand what you’re legally entitled to. Many people leave money on the table simply because they don’t ask.
Statutory Redundancy Pay
You are entitled to statutory redundancy pay if you’ve worked continuously for your employer for two or more years. The amount is calculated based on your age, length of service, and weekly pay (capped at £643 per week in 2026/27). The maximum statutory payout is £19,290.
The calculation is:
- Half a week’s pay for each full year worked before you were 22
- One week’s pay for each full year worked between 22 and 40
- One and a half week’s pay for each full year worked aged 41 or over
Always ask your employer for a written breakdown of how your redundancy pay was calculated. If your employer offers more than the statutory minimum — which many larger employers, public sector organisations, and financial services firms do — check your contract under “redundancy” or “termination.” You may be entitled to significantly more.
Notice Pay and Holiday Pay
You’re also entitled to your notice period (either worked or paid in lieu) and any accrued but untaken holiday pay. These are separate from your redundancy payment and are fully taxable. Keep this distinction clear, as it matters for your benefit claim.
Tax on Redundancy Pay
The first £30,000 of genuine redundancy compensation is tax-free. This doesn’t apply to notice pay, holiday pay, or bonuses — those are taxed as normal income. If your total income for the tax year ends up lower than expected because you’re not working for part of it, you may also be owed a tax refund via HMRC. You can check this through your Personal Tax Account on GOV.UK.
Was Your Redundancy Handled Properly?
Your employer must follow a fair process. If you were selected unfairly — for example, due to your age, pregnancy, trade union membership, or as retaliation for whistleblowing — that may constitute unfair dismissal, not genuine redundancy. If something feels wrong about how you were selected or consulted, contact ACAS or Citizens Advice before signing anything.
Step 2: Sort Your Benefits Without Delay
This is the part most people either don’t know about or feel awkward about. Get over that. Benefits exist for exactly this situation, and waiting even a few days to claim costs you money you won’t get back.
Apply for Universal Credit Immediately
Universal Credit takes five weeks to pay out for the first time, and that clock doesn’t start until you apply. Every day you delay is a day of income you won’t recover.
You can apply online at gov.uk/universal-credit. If you can’t apply online, call 0800 328 5644.
A few important things to know:
- Savings over £16,000 (including your redundancy payout) make you ineligible for Universal Credit. If your redundancy pay pushes you temporarily above this threshold, you may need to wait until your capital falls below it. Call Citizens Advice’s Help to Claim line for timing advice: 0800 144 8444.
- Between £6,000 and £16,000 in capital: you can still claim, but your payments will be reduced.
- Statutory redundancy pay is treated as capital, not income — meaning it counts towards that £16,000 threshold but is not treated as earnings. Notice pay, however, may be treated as earnings and could affect your first assessment period.
- You can request a Universal Credit advance payment while waiting for your first payment if you’re in genuine financial difficulty. Apply for this through your online account or at your first appointment.
New Style Jobseeker’s Allowance (JSA)
If you’ve paid enough National Insurance contributions (usually for two of the last three years), you may also be eligible for New Style JSA, currently paying around £84.80 per weekfor those under 25 and £107.35 per week for those aged 25 and over.
New Style JSA is contribution-based and not means-tested — it isn’t affected by savings or your partner’s income, which makes it a useful supplement even if you don’t qualify for Universal Credit. You can claim both at the same time, though your JSA will be deducted from any Universal Credit you receive. It’s still worth claiming JSA as it separately protects your National Insurance record.
You can apply at gov.uk/jobseekers-allowance.
Other Benefits to Check
Depending on your circumstances, you may also be eligible for:
- Council Tax Reduction — apply directly to your local council; it’s not included in Universal Credit
- Free school meals for children (if you’re receiving Universal Credit)
- NHS dental treatment and prescriptions(free if you’re on Universal Credit)
- Help with mortgage interest — after three months on Universal Credit, you may qualify for a government loan to cover mortgage interest
Use the benefits calculator at entitledto.co.uk or Turn2us to get a personalised estimate of what you might be entitled to.
Step 3: Get Your Finances Under Control
The period between redundancy and your next job is a cash flow problem, not necessarily a financial crisis. Treat it like one.
Build an Immediate Budget
Sit down and work out your actual monthly outgoings — essential and non-essential — against what you expect to receive from redundancy pay, benefits, and any savings. The ONS puts average UK monthly household outgoings at around £2,200, but yours will vary. The goal is to understand your runway: how many months can you manage comfortably, and at what point does that become uncomfortable?
Don’t wait until things get tight to start cutting. The sooner you reduce outgoings, the longer your runway.
Things to action immediately:
- Cancel or pause non-essential subscriptions — streaming, gym, software
- Contact your energy supplier and ask about a payment freeze or reduction plan
- Call your broadband and mobile provider and ask for a hardship option; most have them
- Check whether you have payment protection insurance on any debts or your mortgage; if so, start your claim now, as most policies have a waiting period before they pay out
Talk to Your Lenders Before You Miss Payments
This is critical. Going into arrears without notifying creditors damages your credit file. Reaching out proactively before you miss a payment is a much better position to be in. All regulated lenders are legally required to offer forbearance options in genuine hardship.
The phrase to use: “I’ve recently been made redundant and I’m contacting all my creditors to discuss temporary support. What options do you have?”
Options typically available include:
- Payment holidays (usually up to three months)
- Reduced minimum payments
- Temporary interest-only payments on a mortgage
If debt is becoming genuinely unmanageable, seek free advice from National Debtline (0808 808 4000) or StepChange. Both are free, confidential, and independent.
Think Carefully About Your Pension
If you’re considering stopping pension contributions to free up cash, weigh this carefully — you’ll lose any employer contributions too, which effectively means a pay cut. On the other hand, if you have a larger redundancy payout and are some years from retirement, contributing the tax-free portion of your redundancy pay directly into your pension can be a tax-efficient move. Speaking to an independent financial adviser is worth doing if your payout is significant.
Step 4: Start Your Job Search Properly
The average job search in the UK currently takes between 2.5 and 4.5 months at professional levels, though this varies considerably by sector, location, and seniority. The key is to start immediately, even before you feel ready.
Update Your CV and LinkedIn Profile First
Before you send a single application, get these right. A few things that matter more than many people realise:
For your CV:
- Lead with a short professional summary (three to four lines) that clearly states what you do and what you’re looking for. Recruiters spend an average of six seconds scanning a CV initially — make the first half of the first page count.
- Use clear, specific language. “Led a team of eight across two sites, delivering £2.3m in annual revenue” is more useful than “Experienced manager with strong leadership skills.”
- Tailor it for each role — not dramatically, but enough that the key skills in the job advert appear somewhere in your CV.
- Keep it to two pages maximum.
For LinkedIn:
- Set your profile to “Open to Work” (you can limit this to recruiters only if you’re concerned about current employer visibility, though if you’ve been made redundant this is less of a concern).
- Update your headline beyond just your job title — include what value you deliver.
- Ask former colleagues and managers for recommendations now, while the relationship is fresh.
Where to Look
The job market in 2026 is split. Overall UK job postings on platforms like Indeed sit around 27% below pre-pandemic levels, according to Indeed’s own data. However, postings that mention AI or require digital skills have risen to 127% above pre-pandemic levels. That divergence tells you something important about where to focus.
Job boards and sources worth using:
- Indeed.co.uk — broad coverage, strong for volume
- LinkedIn Jobs — essential for professional and management roles
- Reed — strong across mid-level and specialist UK roles
- Totaljobs — good for professional and skilled trades
- Your sector’s specialist job board — most industries have one worth bookmarking
- Find a Job on GOV.UK — the government’s own jobs service, particularly useful for public sector roles
Don’t ignore the hidden job market. Research consistently suggests that around 70–80% of jobs are never advertised. Speaking directly to former colleagues, attending industry events, and reaching out to companies you’d like to work for can yield results that job boards can’t.
Industries Still Hiring in 2026
While redundancies are rising overall, the job market in 2026 is a paradox — roles in some areas are being cut while others are in genuine short supply. According to analysis by Bristow Holland, areas seeing continued demand include:
- Cybersecurity and information security
- Data and analytics
- Cloud infrastructure and DevOps
- Healthcare and clinical roles (particularly NHS-adjacent)
- Skilled trades (electricians, plumbers, gas engineers)
- Social care and support work
- Project management (especially in digital transformation)
If your background is in an affected sector — administration, customer service, entry-level finance — it’s worth thinking about whether transferable skills could open doors in these areas.
What to Expect from Recruiters
Recruitment agencies can be useful, particularly for specialist roles, but it’s worth understanding how they work. They are paid by the employer, not by you, which means their priority is finding candidates who match open roles they’ve already been briefed on. Register with two or three specialist recruiters in your sector, be clear about what you’re looking for and your notice period situation, and follow up proactively — you are one of many CVs in their system.
Step 5: Look After Yourself
This deserves its own section because it’s often the thing people skip, and it matters more than most of the practical steps above.
Being made redundant can trigger a genuine grief response — loss of identity, routine, financial security, and professional relationships, all at once. That’s a lot. It’s entirely normal to feel anxiety, low mood, or loss of confidence in the weeks after redundancy. Most people do.
A few things that help:
- Keep a routine. Getting up at the same time, setting aside specific hours for job searching, and maintaining activities outside of work all help maintain a sense of structure.
- Be careful with how you spend your time.Spending six hours a day on job boards is rarely as productive as two focused hours of targeted searching and applications.
- Tell the people who need to know. Hiding redundancy from your partner, close family, or friends is exhausting and unnecessary. Their support, and sometimes their networks, are a genuine asset.
- Talk to your GP if anxiety or low mood persists beyond a few weeks. The NHS offers free access to psychological therapies through IAPT (Improving Access to Psychological Therapies) — you can self-refer without needing to see your GP first at nhs.uk/mental-health/talking-therapies-medicine-treatments/talking-therapies-and-counselling/nhs-talking-therapies.
Useful Links at a Glance
| What you need | Where to go |
|---|---|
| Check your redundancy rights | GOV.UK — Redundancy: your rights |
| Calculate statutory redundancy pay | GOV.UK — Redundancy Pay Calculator |
| Claim Universal Credit | GOV.UK — Universal Credit |
| Claim New Style JSA | GOV.UK — Jobseeker’s Allowance |
| Benefits calculator | entitledto.co.uk |
| Benefits advice (redundancy specific) | Turn2us — Redundancy |
| Citizens Advice Help to Claim | 0800 144 8444 |
| Free debt advice | National Debtline / StepChange |
| Redundancy process and employer disputes | ACAS |
| Employment tribunal advice | Citizens Advice |
| Free retraining and courses | GOV.UK — Skills and Training |
| Personal tax account / potential tax rebate | GOV.UK — Personal Tax Account |
The Bottom Line
Redundancy in 2026 is more common than at any point since the pandemic. You’re not unusual, you’re not a failure, and in the vast majority of cases it is temporary. The people who get back on their feet fastest are those who deal with the practical steps early — claiming what they’re entitled to, getting a budget in place, and starting their search before the shock has fully worn off.
The job market is uneven, not broken. Redundancies are rising in some sectors at the same time as hiring continues in others. With a bit of focus on where demand genuinely exists, most people find their next role within a few months.