MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.

31st October 2014
:: Statistics | Earnings Cap and Notional Earnings Cap

Earnings Cap and Notional Earnings Cap
 
 
The Earnings Cap was introduced to set a ceiling on the amount of benefits that could have been paid by defined benefit occupational pension schemes (so this includes company pension schemes and public sector pension schemes). The same limit applied to all personal pension schemes for the tax years from 1989/1990 onwards and was referred to as 'net relevant earnings'.
 
It applies to people who joined an occupational pension scheme set up since 14th March 1989, or who joined an occupational pension scheme from 1st June 1989 (which was set up before 14th March 1989).
 
With effect from 6th April 2006, the limit set by the Earnings Cap has been replaced. For the tax year 2006-2007 and all subsequent years, the Earnings Cap is replaced by the lifetime allowance and the annual allowance limits.
 
However, it is important to understand that many company and public sector defined benefit pension schemes will continue to use the ‘Notional’ Earnings Cap in order to restrict benefits payable. Other employers and pension schemes may choose to set their own Earnings Cap instead.  
External Links
  
 
  Tax Year Earnings Cap     
  2012 / 2013 £137,400 (notional)
(£135,000 using CPI)*
 

* Aries Pensions

  2011 / 2012

£129,600 (notional)
(£127,800 using CPI)*

 

* Aries Pensions

  2010 / 2011 £123,600 (notional)   * HMRC confirmation
  2009 / 2010 £123,600 (notional)   * HMRC confirmation
  2008 / 2009 £117,600 (notional)   * HMRC confirmation
  2007 / 2008 £112,800 (notional)    
  2006 / 2007 £108,600 (notional)    
  2005 / 2006 £105,600    
  2004 / 2005 £102,000    
  2003 / 2004 £99,000    
  2002 / 2003 £97,200    
  2001 / 2002 £95,400  
 
  2000 / 2001 £91,800  
 
  1999 / 2000 £90,600  
 
  1998 / 1999 £87,600    
  1997 / 1998 £84,000    
  1996 / 1997 £82,200    
  1995 / 1996 £78,600    
  1994 / 1995 £76,800    
  1993 / 1994 £75,000    
  1992 / 1993 £75,000    
  1991 / 1992 £71,400    
  1990 / 1991 £64,800    
  1989 / 1990 £60,000    
         
 based on ICTA 1988 s.590C
 Top
 
 
 
 
 
 
 

© MyCompanyPension.co.uk Ltd – 2014