Inland Revenue 7
                                                  17 March 1998
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                  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 poundsand 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. 


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