NHS redundancy pay explained
NHS staff are covered by a contractual scheme that works on a completely different formula from the statutory one — and is usually more generous.
Two different schemes
Statutory scheme
- • Half to 1½ weeks’ pay per year, by age
- • Maximum 20 years counted
- • Weekly pay capped at £751.00
- • Maximum £22,530.00
- • Applies to everyone by law
NHS Agenda for Change
- • One month’s pay per year of reckonable service
- • Not age-banded
- • Counts NHS service across employers
- • Own salary cap and maximum years
- • Contractual, under Section 16 of the handbook
Reckonable service is the thing to check
The single most valuable thing an NHS employee can verify is their reckonable service date. Because NHS service generally carries across trusts and other NHS organisations, someone who joined their current trust three years ago may have fifteen years of reckonable service.
If your redundancy statement shows a service date matching only your current post, query it with HR before accepting anything. Under a scheme paying a month per year, each disputed year is worth a month’s salary.
Where to get the current figures
- • NHS Terms and Conditions of Service Handbook, Section 16 — the authoritative source for the formula, the salary cap and the maximum years counted.
- • Your HR department — can confirm your reckonable service date, which is the figure that matters most.
- • Your union (RCN, UNISON, Unite, BMA) — they run dedicated redundancy advice services and will check a calculation for members.
Establish your statutory floor
Whatever your contractual entitlement, the statutory figure is what you are owed as an absolute minimum by law. It is worth knowing before any conversation with HR.
Common questions
How is NHS redundancy pay calculated?
Staff on Agenda for Change terms are covered by Section 16 of the NHS Terms and Conditions of Service Handbook. It pays one month’s pay for each year of reckonable service, rather than the age-banded weeks used by the statutory scheme. There is a minimum service requirement, a maximum number of years counted, and a cap on the salary used in the calculation.
Is NHS redundancy pay better than statutory redundancy pay?
For most staff, yes — a month’s pay per year is generally more generous than the statutory formula of half to one and a half weeks per year. The NHS scheme is contractual, meaning it sits on top of your statutory rights rather than replacing them, and you receive whichever is greater.
What counts as reckonable service in the NHS?
Reckonable service generally includes continuous employment with NHS organisations, not just your current trust. Service with a previous NHS employer usually carries over if there was no significant break. This is why NHS staff who have moved between trusts are often entitled to far more than their current employment start date suggests.
Does this site calculate NHS redundancy pay?
No. The calculators on this site apply the statutory scheme. The NHS scheme uses a different formula and its own salary cap, which is set out in the Agenda for Change handbook and updated periodically. Use the statutory calculator to establish your legal minimum, then check the handbook or ask your HR department for the contractual figure.