Contribution Limits and Earnings Caps for UK Pensions

The limits of what you can save depend on the type of pension.

Personal Pensions Savings Limits

Company / Occupational Pension Savings Limits

Contribution limits for Stakeholder Pensions

Personal Pensions Savings Limits

The Inland Revenue restricts the percentage of your gross earnings on which they'll give tax relief on personal finance depending on your age as in the table above.

So if you are aged 61 and earning £100,000 a year you can only put in 40% of your salary

Table 1:

Personal Pensions Earnings Caps

For tax year 2003-04 - £99,000
For tax year 2004-05 - £102,000
For tax year 2005-06- £105,600

For latest limits see Inland Revenue website pensions section

Company / Occupational Pension Savings Limits

Contribution limits for occupational pension schemes are a maximum of 15% of your own Gross wages.

(Note: This might be different if you have special status eg you are a high earner who joined the company pension after 1989, or have chosen to be treated as a member who joined the company pension after 1989 and certain other criteria. Your pension department would be able to confirm your exact status).

Company / Occupational Pensions Earnings Caps

ASs with personal pensions there is limit to the amount of salary you can save into a company pension. ie there ios a cut of point.

For tax year 2003-04 - £99,000
For tax year 2004-05 - £102,000
For tax year 2005-06- £105,600

For latest limits see Inland Revenue website pensions section

(i.e.in 05/06 the maximum you could put in is 15% percent of your earnings up to £105,600 a year - depending on your age as in the table above.

So if you are aged 61 and earning £120,000 a year you can only put in 40% of £105,600 a year.)

NOTE: Your employer can pay more on top of this.

Contribution limits for Stakeholder Pensions

If you are not earning, The maximum you can put into a Stakeholder is £3,600 pa gross ie including the tax benefit you get.

If you are earning the same limits as apply as personal and occupational pensions ie.

Note: Very few people actually save up to their limit.

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