Voluntary redundancy: should you take it?

Voluntary redundancy is an invitation, not an instruction. Your employer is asking for people willing to leave, usually to avoid compulsory selections. That makes it a negotiation, and like any negotiation you should know your position before you raise your hand.

How voluntary redundancy works

Voluntary redundancy sits inside the wider redundancy process, which our redundancy rights guide covers from start to finish. The employer announces that redundancies are needed and asks for volunteers. If you volunteer and are accepted, you leave on agreed terms: your notice, your redundancy payment, and often an enhanced package designed to tempt people.

Two things catch people out:

• You can be refused. Employers can reject volunteers, for example if too many people in one team apply. Volunteering does not guarantee you can go.
• Volunteering does not protect you later. If you stay and the process turns compulsory, you are in the selection pool like everyone else.

The money: statutory vs enhanced

The legal minimum is statutory redundancy pay: based on age and service, capped at £751 a week and £22,530 in total (2026/27 rates), and only after two years' service. Our redundancy pay guide has the full calculation.

Enhanced packages are where voluntary redundancy gets interesting. Employers routinely offer multiples of the statutory amount to get volunteers quickly. Whatever you are offered:

• The first £30,000 of a genuine redundancy payment is tax free. Notice pay is not, it is taxed as earnings.
• Ask for the figures in writing, including how the enhancement is calculated.
• Check the treatment of pension contributions, bonuses, commission and accrued holiday.

Five questions before you volunteer

1. What exactly is the package? Get the full breakdown in writing before deciding.

2. Is a settlement agreement attached? Enhanced packages usually come with one. It means giving up your right to claim, so the offer has to be worth it. Our guide to being offered a settlement agreement explains the signing process, and remember the employer normally pays for your legal advice on it.

3. What are my chances in a compulsory round? If your selection scores would be strong, staying costs you nothing and keeps the option open. If they would be weak, the enhanced offer may be the best exit you will get.

4. Do I have something to go to? Redundancy pay stretches further when another role is lined up.

5. What happens to my benefits and mortgage? Some income protection and mortgage policies pay out on compulsory redundancy only. Check the small print before volunteering.

Do not confuse volunteering with resigning

This matters more than anything else on this page. If you resign, you get no redundancy pay at all. Some employers hint that volunteering is "basically handing in your notice". It is not. Voluntary redundancy is still a dismissal by the employer, with redundancy pay attached. If you are being pushed to resign instead, that is a warning sign, and our guide to pay in lieu of notice explains another lever employers use to rush exits.

If the package is generous and you were thinking of leaving anyway, voluntary redundancy can be a genuinely good outcome. If you are being leaned on, or the enhanced offer comes with a settlement agreement you do not fully understand, get advice before you sign. Tell us what you have been offered and we will match you with a specialist within 24 hours.