If you turn down the offer of a suitable job, you may lose your entitlement to redundancy pay.
This will only be the case where your employer (or an associated employer, or a new employer taking over the business) offers you a suitable alternative job before your current contract expires, which is to start within four weeks.
If you think the job may be unsuitable but are still willing to give it a go, you can agree to try it out for a four-week trial period. (This period can be extended if you are being retrained, but arranging an extension must be done in writing).
If at the end of the trial period you remain in the new job, you will lose any rights to a redundancy payment. In law, you will be taken to have accepted the new job.
If you reject the new job before the end of the trial period because it turns out to be unsuitable, or because you are unable to do the new job for good personal reasons (for example commuting distance, or childcare commitments), your redundancy will be considered to have started on the day your old job ended.
However, if you and your employer disagree about whether the alternative job is suitable, or over whether your decision to refuse it was reasonable, you may need to make a claim in an employment tribunal and explain why the job was unsuitable. If the tribunal finds that you have refused a suitable offer of alternative employment, you will lose your right to a redundancy payment.
So, if you are thinking of rejecting an alternative job offer, take advice, and do so in good time. You may be in a stronger position if you give the proposed alternative a try (assuming it looks suitable to an outsider) and then clearly give reasons based on your experience of the job to show that it is unsuitable.