Redundancy payments scheme

March 2026

Introduction

At Lancashire County Council (LCC) we recognise that continuous improvement requires change, often driven by legislation, financial pressures, or digitalisation. We are committed to retaining staff wherever possible by offering suitable alternative employment, promoting flexible deployment and training, and ensuring fair treatment. Open communication and support are key to maintaining engagement and helping employees navigate change with dignity.

However, where redundancy is unavoidable the following scheme sets out our approach to calculating redundancy payments.

The policy does not form part of your contract of employment, and we reserve the right to amend or withdraw it at any time with one month’s notice, in line with the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006.

Scope

This policy applies to all employees on LCC terms and conditions, excluding teaching and non-teaching staff employed by schools; and employees who transferred to the council in accordance with TUPE regulations whose terms and conditions of employment include enhancements that are recognised and maintained by the council.

It does not apply to workers, contractors, consultants or any self-employed individuals working for the organisation.

Calculating a redundancy payment

If you have worked for the council continuously for 104 weeks (two years) you'll be entitled to a statutory redundancy payment.

You’ll get:

Continuous service is capped at a maximum of 20 completed years.

Continuous service is the aggregation of all continuous Local Government and related employment defined within the Redundancy Payments (Continuity of Employment in Local Government) (Modification) Order 1999 (as amended).

Continuous service is counted backwards from the date on which your employment will terminate.

Your weekly pay is the average you earned per week over the 12 weeks before the day you receive your redundancy notice and does not include employer pension contributions or other payments, unless these are contractual.

Weekly pay and therefore the maximum statutory redundancy pay you can receive is capped for the purposes of this calculation and you should refer to the latest government guidance to understand the applicable capped rate.

You can also calculate your statutory redundancy payment using the government's guide.

Pension benefits

Under the Local Government Pension Scheme Regulations, if you are a member of the scheme, your employment is terminated because of redundancy and you are aged 55 or over with at least two years' membership, you will be entitled to immediate payment of your pension benefits. 

For further details about the local government pension scheme and benefits payable you should refer to Pension Point.

Teachers' pension scheme arrangements

The following compensation arrangements will apply to employees who are members of the Teachers' Pension Scheme and whose employment is terminated due to redundancy after at least two years of continuous service. This includes employees whose terms and conditions of employment fall under the JNC for Youth and Community Workers (Pink Book).

If you are over 55, a member of the Teachers' Pension Scheme and your employment is terminated because of redundancy you may access your pension from the date of termination of your employment. However, you should be aware that your pension benefits may be actuarially reduced due to the termination of your employment being before the scheme's normal retirement age.

For further details about the teachers' pension scheme and benefits payable you should refer to the teachers' pension scheme.

NHS pension scheme arrangements

The following compensation arrangements will apply to employees who are members of the NHS Pension Scheme (NHSPS): 

If you are under the NHSPS minimum retirement age and do not qualify for 'special class status' and your employment is terminated because of redundancy there will be no pension implications.

If you are of normal pension age depending upon which section of the scheme is applicable (that is, age 60 for those in the 1995 Section and age 65 for those in the 2008 Section), or hold 'special class status' and meet the criteria to retire at a normal pension age of 55 and your employment is terminated because of redundancy, you may also be able to access your NHS Pension without a reduction to your benefits.

If you are either age 50 and in the 1995 Section, or age 55 and in the 2008 Section of the NHSPS and your employment is terminated because of redundancy you may:

Accept an offer of redundancy and take the full redundancy payment and leave your pension in the NHSPS until your normal pension age.

Accept an offer of redundancy and take the full redundancy payment and access your pension on the basis of voluntary early retirement with reduced pension benefits, i.e. a reduced lump sum and a reduced annual pension.

Accept an offer of redundancy without reduced pension benefits. However, there will be a capitalisation cost to this which represents the strain on the NHSPS by releasing your full pension benefits early. In accordance with the NHSPS regulations, these capitalisation costs are deducted from any redundancy payment due. Where the capitalisation cost is more than the redundancy payment due, the council will be responsible for picking up any additional cost.

For further details about the NHS pension scheme and benefits payable you should refer to NHS pensions

Conditions of voluntary redundancy

Approval of any application for voluntary redundancy will be on the condition that you agree that you will not apply for any posts within the council, including casual work and paid consultancy work, for a period of three years following the termination of your employment.

Similarly, if you accept a job with another local authority within four weeks of leaving the council you may have to repay your redundancy payment.