When an employer goes into administration, the weeks that follow can be chaotic and uncertain. Understanding your immediate rights helps you protect what you’re owed and plan for the income gap.
What Administration Means for Your Employment
Administration is a formal insolvency process where an independent administrator takes control of the company to try to rescue it or recover value for creditors. Crucially:
- Your employment does not automatically end when administration begins
- The administrator may keep operating the business to find a buyer
- If a buyer is found who takes on the employees, TUPE may apply — your employment transfers with its existing terms
- If no buyer is found, the administrator will make employees redundant
Expect a letter or meeting from the administrator within days of appointment confirming your employment status.
Your Immediate Priorities
| Action | Why it matters |
|---|---|
| Confirm employment status with the administrator | Determine if you are still employed or redundant |
| Note what you are owed (wages, holiday, notice) | Needed for NIF claim |
| Apply for Universal Credit if income has stopped | Bridge the gap before NIF payment |
| Keep any redundancy or dismissal notice in writing | Evidence for claims |
What You Can Claim from the National Insurance Fund
If the employer cannot pay, the National Insurance Fund (NIF) — managed by the Insolvency Service — covers:
| Entitlement | Cap |
|---|---|
| Unpaid wages (up to 8 weeks) | £643/week |
| Unpaid holiday pay (up to 6 weeks) | £643/week |
| Notice pay (statutory) | £643/week |
| Statutory redundancy pay | £643/week, max 20 years |
To claim, you’ll need:
- Your form from the administrator (RP1 for redundancy pay/notice, RP2 for wages/holiday)
- Your employment start date, wages, and bank details
- Submit via the Insolvency Service portal at gov.uk
Amounts above the weekly cap are treated as unsecured debts — you may receive a dividend from the estate, but this can be pennies in the pound and take years.
If the Business Is Sold as a Going Concern (TUPE)
If the administrator sells the business or part of it:
- Your employment may transfer to the new owner under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)
- Your terms and conditions transfer with you — the new employer cannot immediately worsen them
- If the new owner makes redundancies shortly after purchase, these may be automatically unfair if connected to the transfer
See our TUPE Transfer Rights Guide for more detail.
Defined Benefit Pension Risk
If your employer has a defined benefit (final salary) pension and the scheme is in deficit, the Pension Protection Fund (PPF) takes over:
- Under pension age at time of insolvency: 90% of accrued benefit (with a cap)
- At or above normal pension age: 100% of accrued benefit (with a cap)
- Increases are slightly lower than full scheme rules
Defined contribution pensions are held in trust and protected separately.