What to do if your employer enters administration

If your employer enters administration, it can feel like a financial bombshell. But there are protections in place to help you, and knowing your rights could make a real difference to your finances during this uncertain time.

When a company enters administration, it means the business is in serious financial difficulty and a licensed insolvency practitioner has taken control. While this doesn’t always mean job losses, it’s a serious warning sign. The recent news that a historic 700-year-old school, an airline and several other UK companies have entered administration shows just how widespread these pressures are — driven by rising costs and financial strain affecting businesses right across the country.

If your employer enters administration, your first priority should be understanding your employment rights and what money you’re owed.

What you’re entitled to:

If you’re made redundant, you may qualify for a statutory redundancy payment based on your age, length of service and weekly pay (up to a maximum of £643 per week as of 2024). Even if the company can’t pay immediately, the government’s National Insurance Fund will cover certain debts, including unpaid wages (up to 8 weeks), holiday pay, notice pay and redundancy payments.

What to do next:

Contact your employer or the insolvency practitioner handling the case to find out what’s happening. Ask directly about your redundancy entitlements and timescales. Make sure you have written confirmation of any redundancy settlement offered.

If you’re unsure whether you’re entitled to redundancy pay, ACAS (the Advisory, Conciliation and Arbitration Service) offers free, impartial advice on employment rights. You can call them on 0300 123 1100 or visit acas.org.uk.

You may also qualify for Jobseeker’s Allowance or Universal Credit while you search for new work. Apply as soon as you know your job is at risk — don’t wait until you’re unemployed.

Keep records of everything: payslips, emails from your employer, and any redundancy documents. These will be important if you need to claim unpaid wages from the National Insurance Fund.

If you’ve lost your job due to company administration, the Job Centre can help with Universal Credit claims and job support. Visit gov.uk to apply or find your local Job Centre.