IR 5                                                    29 November 1994
               
               PENSION SCHEMES EARNINGS CAP

The Chancellor proposes in his Budget to increase from
pounds 76,800 to pounds 78,600 the maximum level of earnings for which
pension  provision may be made with tax relief. The new figure 
applies from 6 April 1995.

                     NOTES FOR EDITORS

1.    The Finance Act 1989 placed a limit on the level  of earnings 
which may be pensioned under tax-approved pension schemes. The cap 
was originally set at pounds 60,000  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, 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  Price 
Index of 2.18 per cent in the  year  to September 1994, rounded up to
the next multiple of pounds 600.

3.   The cap applies to all people who:

    contribute to a personal pension scheme;

    joined an occupational pension scheme set up  since 14 March 1989;  
    or

    joined any occupational scheme from 1 June 1989.