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Budget
17 March 1998
PENSION SCHEMES EARNINGS CAP
The Chancellor proposes to increase from 84,000 pounds to
87,600 pounds the maximum level of earnings for which pension
provision may be made under occupational and personal pension
schemes. The new figure applies from 6 April 1998.
NOTES FOR EDITORS
1. The Finance Act 1989 placed a limit on the level of
earnings for which pension provision may be made under
tax-approved pension schemes. The cap was originally set at
60,000 pounds and is automatically increased annually in line
with retail prices, unless Parliament determines otherwise.
Its main effect is to set a ceiling on the contributions that
can be paid to, and the benefits that can be paid by,
tax-approved pension schemes, in respect of people to whom the
cap applies.
2. The increase announced today is in line with the
statutory indexation provisions based on the increase in the
Retail Prices Index of 3.6 per cent in the year to September
1997, rounded up to the next multiple of 600 pounds.
3. The cap generally applies to people who:
- contribute to a personal pension scheme;
- joined an occupational pension scheme set up since 14
March 1989;
- joined any occupational pension scheme from 1 June 1989.
INLAND REVENUE PRESS OFFICE
