Figures used to value a UK settlement agreement, 2026/27
These are the statutory figures that drive the value of a UK settlement agreement in the 2026/27 tax year: the capped weekly pay figure used in redundancy and unfair-dismissal arithmetic, the tax-free termination threshold, the Vento injury-to-feelings bands, and the Statutory Maternity Pay flat rate. Every figure below links to the order or guidance that sets it, so you can check it directly rather than take our word for it.
What are the current settlement-agreement figures?
| Figure | 2026/27 | Effective from |
|---|---|---|
| Weekly pay cap (redundancy and basic award) | £751 | 6 April 2026 |
| Maximum statutory redundancy payment | £22,530 | 6 April 2026 |
| Maximum compensatory award (ordinary unfair dismissal) | £123,543 | 6 April 2026 |
| Vento lower band (injury to feelings) | £1,300 to £12,600 | 6 April 2026 |
| Vento middle band | £12,600 to £37,700 | 6 April 2026 |
| Vento upper band | £37,700 to £62,900 | 6 April 2026 |
| Tax-free termination payment threshold | £30,000 | 6 April 1988 |
| Statutory Maternity Pay, flat weekly rate | £194.32 | 5 April 2026 |
What changed from 2025/26 to 2026/27?
Each figure below is uprated annually by statutory instrument or Presidential Guidance addendum. The table shows the previous tax year's figure against the current one, so you can see the size of the increase.
| Figure | 2025/26 | 2026/27 |
|---|---|---|
| Weekly pay cap | £719 | £751 |
| Maximum statutory redundancy payment | £21,570 | £22,530 |
| Maximum compensatory award | £118,223 | £123,543 |
| Vento lower band | £1,200 to £12,100 | £1,300 to £12,600 |
| Vento middle band | £12,100 to £36,400 | £12,600 to £37,700 |
| Vento upper band | £36,400 to £60,700 | £37,700 to £62,900 |
| SMP flat weekly rate | £187.18 | £194.32 |
The £30,000 tax-free termination payment threshold is not on this list: it has been unchanged since 6 April 1988 and is not part of the annual uprating round.
Where do these figures come from?
The weekly pay cap, the redundancy cap, and the compensatory award cap for 2026/27 come from the Employment Rights (Increase of Limits) Order 2026 (SI 2026/310). The Vento bands come from the Ninth Addendum to the Presidential Guidance on injury-to-feelings awards, dated 30 March 2026. The 2025/26 figures come from the equivalent 2025 Order and Eighth Addendum. The SMP flat weekly rate comes from the annual rates-and-thresholds guidance published for employers. The tax-free threshold is set by section 403 of the Income Tax (Earnings and Pensions) Act 2003.
- Employment Rights (Increase of Limits) Order 2026 (SI 2026/310)
- Presidential Guidance, Vento bands, April 2026 addendum
- Employment Rights (Increase of Limits) Order 2025 (SI 2025/348)
- Presidential Guidance, Vento bands, April 2025 addendum
- Rates and thresholds for employers 2026 to 2027 (SMP)
- HMRC Employment Income Manual, EIM13505 (£30,000 threshold)
These figures are uprated every April. This page is republished the day the new Statutory Instrument is laid, so it always reflects the rates in force at the time you read it rather than the rates in force when the page was first written.
Using these figures in a settlement agreement?
A solicitor can explain how these limits relate to the figures in your agreement before you sign.
Monday to Friday, 9am to 6pm