What a voluntary redundancy offer is actually worth

In April, a poster on MoneySavingExpert's redundancy board shared the exact figure she had been offered to leave her job of 19 years. It was £70,216.14, down to the penny. What her employer would not tell her was the only number that mattered, the amount that would actually land in her bank account after tax. She was told to work it out herself. If you are weighing up voluntary redundancy right now, her thread is the whole problem in miniature. A voluntary redundancy offer is a price for your job, and most people say yes or no without ever finding out what that price really is.

That is the argument of this piece. Before you volunteer, price the offer properly. Not the headline figure on the letter, but the net amount, converted into the months of breathing room it would actually buy you.

Voluntary redundancy is an offer, not an entitlement

The mechanics first, because two misconceptions do a lot of damage. When an employer is planning redundancies, it can invite volunteers, or you can put yourself forward. Acas is clear on what happens next. Your employer does not have to agree. If your skills are ones the business wants to keep, you can volunteer and be turned down. Volunteering is a request, not a trigger.

The second misconception runs the other way. Accepting voluntary redundancy is not resigning. If your employer agrees, you are made redundant, with the same statutory rights as anyone selected in a compulsory round. The legal floor is statutory redundancy pay. For redundancies from 6 April 2026, that works out at a maximum of £751 per week of counted pay, capped at 20 years of service, with an absolute ceiling of £22,530. Most voluntary schemes offer an enhanced package above that floor. The gap between the statutory minimum and what you are being offered is the first thing worth knowing, because it tells you what you would be walking away from if you waited and were made redundant anyway.

The headline number is not the real number

Redundancy pay is tax free only up to £30,000. Everything above that line is taxed as income in the year you receive it, and so are several things that often sit inside the headline figure, including payment in lieu of notice and unused holiday (gov.uk).

That £30,000 threshold is far older than most people realise. It has been stuck at the same level since 1988, and investment platform AJ Bell calculates that it would be worth more than £70,000 today had it risen with inflation, leaving some people paying up to £17,200 more tax on a payout than they would under an indexed threshold. A limit that once covered almost every redundancy cheque in the country now catches a large share of long-service leavers.

Go back to that £70,216.14 offer. Only £51,839 of it was redundancy compensation, so £30,000 of that came tax free. The rest of the compensation, plus notice pay and other taxable elements, was taxed as income, and forum regulars estimated that roughly £10,000 of the total was heading to HMRC before it reached her. Her verdict on employers that hand over a gross figure and nothing else was that they could easily do the sums for you "instead of leaving you in a state of worry".

The same board is full of the knock-on questions. Because the whole lump lands in a single tax year, people on modest salaries discover that a payout has pushed part of their income into a higher band for that year, and others ask whether paying some of it into a pension would soften the hit. Those mitigations exist and can be worth proper advice, but they all start from the same place. Know the net number before you decide, not after.

Price the offer in months, not pounds

Once you have the net figure, the useful conversion is not into salary but into time. Divide it by your essential monthly costs, the mortgage or rent, bills, food and minimum commitments version, not your current lifestyle. That is the number of months the offer actually buys you. Then ask the harder question. Is that longer than it would realistically take you to be earning again?

Be sober about the market side of that question. The ONS labour market overview for June 2026 shows vacancies falling again in the latest quarter, to their lowest level since the spring of 2021. Sectors differ enormously, but "I will walk into something" is a plan that deserves testing before you sign, not after.

The people who have faced the decision describe exactly this tension. In a long Mumsnet thread, a 54 year old offered roughly two years of salary laid out the dilemma. Her husband said take it. A friend insisted there were no jobs out there. One reply warned that after a year away from work she would be a less attractive candidate with a gap on her CV, and another argued the opposite, that an employer offering voluntary redundancy is usually a sign of deeper change coming, and the package would not be on the table twice. She took the offer, and two months later posted an update. She had landed a role in a new sector on lower pay, and the payout was the reason the pay cut did not matter. Both sides of that thread were right. The money is a cushion, not an income, and what it cushions is the search.

One more line of small print deserves its own check. Some schemes claw the money back if you return too soon. NHS staff comparing notes on voluntary redundancy terms describe clawback periods of six to twelve months, depending on the size of the payout, if you rejoin an NHS organisation. If your most likely next job is in the same system you are leaving, a clawback clause can undo the entire deal.

Before you say yes

A short list of checks, all in service of the same question, what is this offer actually worth to you?

• Get the net figure. Ask your employer to confirm it in writing. If they will not, work it out from the gov.uk tax rules or have an adviser do it. Never decide on the gross number.
• Convert it into months. Net payout divided by essential monthly costs. That is your real runway.
• Estimate your search honestly. Look at live vacancies for your role and region before you sign. If similar roles are scarce, price the search in months accordingly.
• Read the scheme terms. Clawback clauses, notice pay, accrued holiday, and what happens to your pension all belong in the calculation. If you are asked to sign a settlement agreement, you are entitled to independent advice on it, usually with the employer contributing to the cost.
• Compare it with staying. If the restructure goes ahead anyway, a later compulsory round may pay less than the enhanced package in front of you, or your role may survive. Neither is guaranteed, and Acas notes your employer decides who goes either way.

None of this is financial advice, and a payout large enough to change your tax position is worth an hour with a professional. The point is simpler. The letter gives you a number designed to be looked at. The decision needs the number underneath it.

If the offer is on your table

However carefully you price it, a voluntary redundancy offer buys you one thing, time to find the next role. That is the variable you have most control over, and it is the one Hireable exists to shrink. Hireable builds and tailors your CV to every role so you get seen, sharpens your interviews with honest practice so you get heard, and finds and applies to roles that fit so you get hired. Among supported jobseekers, 92% are hired within three months. Run that against your months-of-runway sum. An offer that has to fund a three month search is a very different proposition from one that has to fund a year, and that difference, not the figure on the letter, is what you are really being offered.

Voluntary redundancy FAQs

Is redundancy pay taxable? The first £30,000 of a genuine redundancy payment is tax free. Anything above that is taxed as income in the year you receive it, and payment in lieu of notice and unused holiday are taxed in full from the first pound (gov.uk).

Can my employer refuse my request for voluntary redundancy? Yes. Volunteering is a request, and your employer can decline it based on the needs of the business, for example to keep skills it cannot lose. Refusing you because of a protected characteristic such as age, sex or disability could be discrimination (Acas).

How much is statutory redundancy pay in 2026? For redundancies on or after 6 April 2026, weekly pay is capped at £751 and the maximum statutory redundancy pay is £22,530, based on age, length of service capped at 20 years, and weekly pay (gov.uk). Voluntary schemes usually pay above this floor.

Is voluntary redundancy the same as resigning? No. If your employer accepts your application, you are dismissed by reason of redundancy, with the same statutory redundancy rights as someone selected compulsorily, provided you have at least two years of service. Resigning would give you none of those rights.