What happens to my wages if my employer goes bust in the UK?

When your employer becomes insolvent, you are treated as a preferential creditor in the insolvency proceedings — which means you rank ahead of most unsecured creditors for certain employment-related debts. However, there are caps. You can recover up to 8 weeks' unpaid wages (capped at £800/week — the same cap that applies to statutory redundancy pay), up to 6 weeks' accrued holiday pay, and any unpaid notice pay up to the statutory minimum.

In addition, you can make a claim to the Redundancy Payments Service (RPS) — a government scheme funded by the National Insurance Fund — to recover statutory redundancy pay, pay in lieu of notice (capped at the statutory minimum), up to 8 weeks' unpaid wages, holiday pay, and any unreimbursed notice pay. Claims are made online at gov.uk. The RPS typically processes claims within 6 weeks.

If your employer owes you more than the statutory caps (for example, if your salary is above £800/week or you are owed many weeks of pay), you may file for the remainder as an unsecured creditor in the insolvency — but in practice, unsecured creditors typically receive very little or nothing. If you believe your employer has been fraudulently stripping assets before insolvency, you can report concerns to the Insolvency Service.