Changes To Statutory Payments in 2021

April 2021 sees changes to UK HR practices in relation to statutory payments and compensation limits for employees. These changes also include compensation for unfair dismissal, redundancy pay, national minimum wage, statutory sick pay and statutory family leave pay.

The most notable changes are:

National Minimum Wage

From 1 April 2021, the following minimum rates of pay will apply:

The National Living Wage, which currently applies only to workers age 25 or over, will be extended to 23- and 24-year-olds for the first time:

  • The National Living Wage for ages 23 plus is £8.91 (up 2.2%)

The National Minimum Wage for:

  • 21 to 22-year-olds – £8.36 (up 2%)
  • 18 to 20-year-olds – £6.56 (up 1.7%)
  • Under-18s – £4.62 (up 1.5%)
  • For apprentices – £4.30 (up 3.6%)

Weekly pay

A number of employment claims are based on a value and this is often calculated by reference to the employee’s weekly pay. This weekly pay is itself subject to a cap of a prescribed amount.

From April 2021, the prescribed cap on weekly pay will increase to £544. Consequently, statutory redundancy pay will increase, with the maximum payment increasing to £16,320.

Compensation for unfair dismissal

Compensation for unfair dismissal claims is split into a “basic” award and a “compensatory” award. The basic award is calculated in the same way as statutory redundancy pay and will, therefore, increase as described above.

The compensatory award is calculated by reference to the claimant’s loss of earnings, subject to a statutory cap. The cap on the compensatory award for ordinary unfair dismissal claims will increase as of 6 April 2021 to £89,493 (or 52 weeks’ gross actual pay, if lower). These new figures will apply where the effective date of termination falls on or after 6 April 2021.

Statutory sick pay

From April 2021 the rate at which statutory sick pay is paid will increase to £96.35 per week.

Statutory family-related leave

The prescribed rate for statutory maternity pay, adoption pay, paternity pay and shared parental pay will increase as of April 2021 to £151.97 per week. The new right to statutory parental bereavement pay will also be paid at £151.97 per week.

Please take a look below for our table detailing all the statutory payments and compensation limits for 2021.

Statutory payments and compensation limits for 2021

Each April, the limits on compensation and statutory payments increases.  The tables below show the limits effective 6th April 2021.

Statutory payments and compensation limits for 2021


If you have any questions regarding the above or would like advice on the above, the please get in touch.