The government has confirmed annual increases to statutory rates and compensation limits in Employment Tribunal awards, which will take effect from 6 April 2026.
These are summarised as follows:
National minimum wage
- Apprentices and under 18: £7.55 to £8 per hour
- 18 – 20 years old: £10 to £10.85 per hour
- 21 years old and above: £12.21 to £12.71 per hour
Statutory rates impacting family-friendly rights
The rate of pay per week will increase from £187.18 to £194.32 and applies to:
- Statutory maternity pay
- Statutory adoption pay
- Paternity pay
- Neonatal care pay
- Parental bereavement pay
- Maternity allowance
A week’s pay
The statutory cap on a week’s pay will increase from £719 to £751, applying to the calculation of unfair dismissal awards and statutory redundancy pay.
Unfair dismissal award
The most notable change is to the unfair dismissal compensatory award cap. For dismissals which take place either on or after 6 April 2026, the cap will increase from £118,223 to £123,543, or 52 weeks’ gross pay (whichever is lower).
This is the last time the cap will be increased because, after 1 January 2027 (based on current timeframes), this cap will be abolished entirely.
This means that employees who are high earners can potentially be awarded very significant sums if they succeed with a claim for unfair dismissal. Coupled with the other significant change on 1 January 2027, when the qualifying period for unfair dismissal claims will reduce to 6 months’ service (currently 2 years), employers may be facing more claims on the horizon. If you have not already, we would recommend that you review your policies and procedures to manage risk appropriately.
If you are concerned about the impact or wish to discuss with a member of the Employment team, we’re here to help. Please get in touch with us at Employment@SchofieldSweeney.co.uk.