People Who Lost Jobs In Business Failures Thrown Vital Lifeline By Insolvency Service

24th July 2024

The Insolvency Service's Redundancy Payments Service processed more than 85,000 claims from former employees of companies which had become insolvent.

The Redundancy Payments Service (RPS) received 85,592 redundancy payments claims in 2023-2024.

Funding of £494 million from National Insurance payments helped people who had been left in financial crisis.

The service ensured claims for redundancy payments were processed in an average of 10 days.

The Insolvency Service paid out more than £490 million in redundancy payments during 2023-24 to people who had been left in financial distress after the companies they worked for became insolvent.

The latest Annual Report and Accounts released by the agency this week showed it received 85,592 claims for redundancy payments across the year, paying out a total of £494 million through its Redundancy Payments Service, which is funded by National Insurance Contributions.

Calls to the Redundancy Payments Service included cases where people's former employers owed unpaid wages, holiday pay and statutory notice pay. Across the year, claims were processed in an average of 10 days.

John Wheatle, Director of the Insolvency Service's Business Division, said:

We understand how difficult it is for people when they have been made redundant by companies which have become insolvent. Our Redundancy Payments Service team help to alleviate some of those difficulties by making the payments process as smooth as possible.

Our RPS team works incredibly hard to make sure people are paid quickly, efficiently and with excellent customer care.

It's an important part of our service and we are proud to have supported so many people who faced financial distress at a challenging time in their lives.

The Redundancy Payments Service makes payments to people whose employer has become formally insolvent. Former employees can apply to the service for money they are owed by the company.

Last year's payments included £53.7m in redundancy and statutory notice pay to almost 10,000 former staff of high street chain Wilko, which went into administration in August 2023. Those claims were processed and paid within 24 hours.

Depending on an employee's circumstances, the Redundancy Payment Service can pay redundancy pay, holiday pay, outstanding payments like unpaid wages, overtime and commission and money that employees would have earned working their notice period.

The Redundancy Payments Service can also pay a protective award, which is compensation awarded by an employment tribunal because an employer did not consult with employees before they were made redundant. Such awards often take place several years after the insolvency of the employer.

Last year’s protective award payments included more than £1.4 million to over 400 former employees of collapsed high street chain Debenhams and more than £2.1 million to over 700 former employees of Gatwick-based aviation company Norwegian Air Resources UK Limited.

The Redundancy Payments Service also has the power to recover money, either from a solvent employer or by lodging a claim in the company’ s insolvency. Money it recovers repays the National Insurance Fund for redundancy payments made to former staff. Last year it returned £29m to the National Insurance Fund from assets recovered from insolvent companies.

People can apply for redundancy payments from the Redundancy Payments Service through an online application form. Information to help people apply can be found in our online factsheet

, where they can check:

whether they are eligible to apply

what they can apply for

how to apply

what details people need to make a claim

how payments are calculated

when people can expect money they are owed