By Team SalaryCalculate · 1/7/2026
State Pension Implications of Redundancy: Protecting Your Future
Being made redundant can be a challenging time. It brings about uncertainty and financial worries. One key concern is how redundancy could impact your state pension. This article aims to unravel these complexities and guide you on how to protect your future.
Understanding Your State Pension
Your state pension is a regular payment that you receive from the government once you reach state pension age. The amount you receive is based on the National Insurance (NI) contributions you've made during your working life.
If you're made redundant, the amount of NI contributions that you can make will likely be affected, which could potentially impact your state pension.
How Redundancy Affects Your State Pension
If you are made redundant, it means you are no longer earning a salary from which NI contributions can be deducted. This could result in a gap in your NI record, which could in turn affect the amount of state pension you'll receive.
However, it's important to note that being made redundant doesn't automatically mean your state pension will be reduced. This will depend on several factors, such as:
The number of qualifying years on your NI record
Whether you receive certain benefits after your redundancy
Whether you can make voluntary NI contributions
Making Sure You Have Enough Qualifying Years
To get the full state pension, you need a certain number of qualifying years on your NI record. As of 2025, you need 35 qualifying years to get the full state pension.
If you've been working and paying NI contributions, each year you've been doing so counts as a qualifying year. If you're made redundant before you've built up the required number of qualifying years, this could impact your state pension.
However, even if you have fewer than 35 qualifying years, you could still be entitled to a portion of the state pension. As long as you have at least 10 qualifying years, you should be eligible for some state pension.
Redundancy Pay and State Pension
Redundancy pay, up to the legal limit of £21,570, is tax-free. However, it does not count towards your NI contributions. So, while it may provide a financial buffer, it won't protect your state pension.
Protecting Your State Pension After Redundancy
There are several ways you can protect your state pension if you're made redundant:
**Claim benefits:** Certain benefits, like Jobseeker's Allowance, can count towards your NI record. This can help protect your state pension.
**Make voluntary contributions:** If you have gaps in your NI record, you might be able to make voluntary contributions to make up for them.
**Return to work:** If you find a new job, you can start building up more qualifying years again.
Planning Your Finances After Redundancy
Using tools like our [redundancy pension calculator](/tools/uk/england/redundancy-pension-calculator) and [redundancy budget planner](/tools/uk/england/redundancy-budget-planner) can help you plan your finances after redundancy.
In addition, you might want to look into your [redundancy-pension-options](/blog/redundancy-pension-options) to understand how to best manage your pension after redundancy.
FAQs
What's the maximum redundancy pay I can get?
As of April 2025, the maximum statutory redundancy pay is £21,570. This is based on a maximum weekly pay cap of £719, multiplied by 20 years, then multiplied by 1.5.
Can redundancy pay be put into a pension?
Yes, you could choose to put some or all of your redundancy pay into a pension. However, it's important to consider your immediate financial needs as well.
Can I claim benefits if I've been made redundant?
Yes, depending on your circumstances, you might be eligible for benefits like Jobseeker's Allowance or Universal Credit.
How can I check my NI record?
You can check your NI record online through the HMRC website. This will show you any gaps in your record and whether you can make voluntary contributions.
In conclusion, redundancy can have implications for your state pension. However, understanding these implications and planning accordingly can help protect your future.
Remember, everyone's situation is different. It's important to seek professional advice that's tailored to your individual circumstances.
