Restriction on public sector exit payments

01 February 2017


Section 41 of the Enterprise Act 2016 comes into force on 1 February 2017 which caps public sector exit payments at £95,000.

A statutory instrument has been made which will bring The Enterprise Act 2016 (Commencement No. 2) Regulations 2017 into force on 1 February 2017.


Geographical extent – these regulations apply to all four nations of the UK.


The regulations restrict exit payments payable to employees of prescribed public sector authorities or holders of prescribed public sector offices as a consequence of them leaving employment or office to a maximum value of £95,000.

An exit payment for the purposes of these regulations is a payment of a prescribed description which includes any payment:

  • on account of dismissal by reason of redundancy
  • on voluntary exit
  • to reduce or eliminate an actuarial reduction to a pension on early retirement or in respect of the cost to a pension scheme of such a reduction not being made
  • ex gratia
  • in respect of an outstanding entitlement
  • of compensation under the terms of a contract;
  • in lieu of notice
  • in the form of shares or share options.