Compensation limits and minimum awards increase
Tuesday 24th March 2026
Compensation limits and minimum awards will increase where a claim arises on or after 6 April 2026. The changes include:
- Raising the maximum compensation for unfair dismissal from £118,223 to £123,543 (or 12 months’ pay if lower); and
- Increasing the cap on a week’s pay from £719 to £751. This figure is used to calculate various entitlements, including the basic award and statutory redundancy pay.
However, from 1 January 2027, the cap on the compensatory award will be removed, when the qualifying period for unfair dismissal will reduce to 6 months.
All information in this update is intended for general guidance only and is not intended to be comprehensive, or to provide legal advice.