26.05.2026

Job market crisis: UK redundancy warnings in 2025 were at their highest since the pandemic, with payouts topping £477m

By the end of 2025, unemployment in the UK rose to the highest rate in almost five years, reaching 5.2 per cent in the final quarter of the year. Britain’s labour market is showing increasing strain as businesses struggle to battle rising operational costs, less demand, and ongoing economic uncertainty. The challenges facing businesses have led to many employers cutting their workforce or even going into insolvency altogether.

Now, new data sourced by the experts at Liquidation Centre has revealed that 2025 was the most severe year for redundancy warnings since 2020, with 315,605 jobs flagged for potential redundancy and redundancy payouts totalling £477,709,323 in 2025.

The experts at Liquidation Centre, a trusted UK liquidation firm focused on solvent liquidations (MVL), for contractors and small business owners, while also supporting Creditors’ Voluntary Liquidations (CVL) for insolvent businesses, sent a Freedom of Information request to the Insolvency Service to determine how many employers made or planned redundancies and the expected redundancy payout for proposed dismissals from 2020 to 2025.

Study highlights:

2025 was the worst year since COVID for redundancies, with 315,605 jobs flagged for potential redundancy with a combined payout of £477,709,323
In the first two months of 2026, 736 employers have already filed for proposed redundancies, putting 56,396 jobs at risk of redundancy - 9 per cent higher than in 2025
The number of HR1 advance notice of redundancy forms issued in February 2026 (430) is almostidentical to February 2009 (433), shortly before the recession peak
Over 2 million redundancy warnings were made between 2020 and 2025 (2,087,709), with June appearing as the worst month for redundancies in the UK

Redundancies rose by 45 per cent between 2021 and 2025

Liquidation Centre’s Freedom of Information request uncovered that over 2 million redundancy warnings were issued between 2020 and 2025 (2,087,709), with 2025 the most severe year for redundancy warnings in the past five years. Last year, 315,605 jobs were flagged for potential redundancy, a 45 per cent increase since 2021, with redundancy payouts totalling £477,709,323.

Redundancies already up 9 per cent year-on-year in 2026

Because redundancy warnings are typically filed weeks or months before job losses take effect, the elevated figures seen in 2025 may continue to persist through into early 2026.

In the first two months of 2026, 736 employers filed for proposed redundancies, putting 56,396 jobs at risk of redundancy, compared to the first two months of 2025, which were 51,905 redundancy warnings, a 8.65 per cent increase in warnings.

UK redundancy payouts near half a billion in 2025

2025	Total HR1 forms received	Total number of potential redundancies	Unique number of employers submitting HR1 forms	Gross value of redundancy payments (£)
January	387	23,199	327	£40,259,812.40
February	420	28,706	363	£34,442,879.91
March	477	31,825	387	£42,540,317.32
April	365	23,769	312	£41,487,098
May	382	24,643	328	£33,244,843
June	414	32,428	334	£37,410,232
July	407	25,162	318	£36,011,031
August	285	23,436	240	£36,342,589
September	345	24,504	294	£37,536,786
October	412	25,461	334	£45,811,145
November	412	30,396	337	£37,060,417
December	248	22,076	221	£55,562,172
Total	4,554	315,605	3,795	£477,709,323
January 26	396	28,493	356	N/A
February 26	430	27,903	380	N/A

Full dataset available here.

The number of HR1 advance notice of redundancy forms issued in February 2026 (430) is almost identical to February 2009 (433), shortly before the peak of the 2008-2009 recession, highlighting the scale of pressure currently facing the UK labour market.

Using historical redundancy data, the experts at Liquidation Centre estimate that 2026 could see as many as 327,227 redundancies, with 11,622 more jobs lost than in 2025. This marks a forecasted 3.7 per cent increase from 2025; however, this is less severe than that of 2024-2025, which saw an 18.1 per cent increase in redundancies.

Richard Hunt, Director at Liquidation Centre, weighs in on why 2026 may be another record year for redundancies: “Redundancies are happening at a rapid pace in the UK as the economy continues to change and industries adapt. including automation and AI. Unlike in 2020, when redundancies were largely driven by a single crisis, the rise in redundancy warnings in 2025 appears to reflect more ongoing pressures on employers. These include rising operating costs, wage inflation, and policy changes such as higher employer National Insurance contributions.

"2026 is already shaping up to be an unfortunate record year for redundancies. Increased competition, cost of living, taxation, and wage inflation are all key contributing factors. Global political uncertainty also often has a knock-on effect on businesses around the world, and the UK is no exception. Disrupted trade and supply chains, rising operating costs, and poor business confidence are likely to add further strain for businesses.”

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