Pension Schemes - Pensions earnings cap and the transitional period

Written by Ian Congreave - Filed under: Pension Schemes on March 2nd, 2009

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Pension scheme trustees may continue to use the pensions earnings cap, which officially ceased to exist from 6 April 2006, for the purpose of restricting pension payments from a registered pension scheme for a transitional period. The transitional period ends on the earlier of

the date from which the pension scheme rules are changed so that the existing limits no longer apply, and
the end of the 2010/11 tax year.

Although the earnings cap, fixed at £105,600 for 2004/05, has not been increased in legislation since April 2006, HMRC continue to review it annually for these transitional purposes. The notional value of the pensions earnings cap is increased from £117,600 for 2008/09 to £123,600 for 2009/10.

Further information:
Notional Earnings Cap 2009/10

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Written by Ian Congreave -

Filed under: Pension Schemes on March 2nd, 2009