Earnings cap meaning

The single tier State Pension (on and from 6 April 2016) On 6 April 2016, the Basic State Pension was overhauled and replaced by a single-tier, flat-rate pension, merging the Basic State Pension with the Second State Pension. From that date, men and women alike must have 35 qualifying years of National Insurance contributions to receive the full flat-rate amount. Marital status makes no difference to the level paid. Tax year Amount (per week) 2026/2027 £241.30 2025/2026 £230.25 2024/2025 £221.20 2023/2024 £203.85 2022/2023 £185.15 2021/2022 £179.60 2020/2021 £175.20 2019/2020 £168.60 2018/2019 £164.35 2017/2018 £159.55 2016/2017 £155.65 The Basic State Pension (before 6 April 2016) Before 6 April 2016, the Basic State Pension comprised the Basic State Pension and the Second State Pension. There was a third, minor, component known as the graduated pension that depended on graduated National Insurance contributions paid by employees while the graduated scheme ran from 1961 to...

In this issue: Employment law issues Tax treatment New content Useful Information Trackers Dates for your diary Weekly highlights from other practice areas Employment law issues Uncapped unfair dismissal—why bonus and equity are now central to exit risk Employment analysis: The Employment Rights Act 2025 was passed just before Christmas and employers are now preparing for its reforms, which will take effect in stages from as early as February 2026. Among the most significant changes for reward is the removal of the statutory cap on the compensatory award for unfair dismissal (currently the lesser of 52 weeks’ gross pay and £118,223). The risk is not merely “larger tribunal awards”. The true change is commercial: once ordinary unfair dismissal is no longer limited by a statutory ceiling, the value of claims becomes more fact-driven. That brings bonus and equity to the centre of quantum, settlement dynamics and, in practice, board-level decision-making. Nigel Watson of Burges Salmon considers...

In this issue: Employment Rights Act 2025 Immigration Pay Pensions Tax Maternity, parents and carers Data protection and employee information Industrial action Bribery, tax evasion and modern slavery Industrial Relations Law Reports (IRLR)—April 2026 New and updated content Dates for your diary Trackers Employment resources on Lexis+® LexTalk®Employment: a Lexis®Nexis community Daily and weekly news alerts Employment Rights Act 2025 Employment Rights Act 2025 (Statutory Sick Pay) (Consequential Amendments) Regulations 2026 SI 2026/210: The Regulations revise the Statutory Sick Pay (General) Regulations 1982, SI 1982/894, and the corresponding Northern Ireland instrument, deleting mentions of waiting days and the lower earnings limit, so as to implement sections 10–13 of the Employment Rights Act 2025 (ERA 2025), which abolish statutory sick pay waiting days and remove the lower earnings threshold. They are scheduled to take effect on 6 April 2026. See: LNB News 06/03/2026 27...

Original news Mr S (CAS-44597-S2Z6)—17 October 2024 Summary The Pensions Ombudsman dismissed a complaint about how the preservation laws were applied to a scheme’s benefit structure and accrual design. The scheme rules imposed both an accrual cap and an earnings cap. The Ombudsman concluded there was no breach of preservation legislation because the scheme’s uniform benefit accrual operated as an exception to the general principle that short-service benefits must be calculated on the same basis as long-service benefits. In addition, a 1989 change to HMRC rules did not require the removal of the caps that had been hard-coded into the scheme rules. The decision highlights that older HMRC provisions, once embedded within a pension scheme’s own rules, can be difficult to interpret and apply in practice. What were the facts? Mr S was a deferred member of the Svenska UK Retirement and Death Benefit Scheme (the Scheme). The Scheme rules applied both an accrual cap and an earnings cap...

ARCHIVED: This Practice Note is archived and not being maintained. It reviews the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (Week’s Pay Amendment Regs 2020), SI 2020/814, which ensure that employees furloughed under the Coronavirus Job Retention Scheme (CJRS) for any period ending on or before 30 September 2021 receive statutory redundancy pay, statutory notice pay and other entitlements by reference to their usual earnings rather than the reduced furlough rate. For details on the Coronavirus Job Retention Scheme (CJRS), extended to 30 September 2021, see Practice Note: Coronavirus Job Retention Scheme (extended version 1 May to 30 September 2021) [Archived]. For general guidance on working out a week’s pay under sections 221–224 of the Employment Rights Act 1996 (ERA 1996), see Practice Note: Calculating a week’s pay. The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (Week’s Pay Amendment Regs 2020), SI 2020/814, which took effect on 31 July 2020, prescribe how a week’s pay is to...

The automated unfair dismissal schedule of loss application streamlines preparing a schedule, enhances accuracy and makes future revisions straightforward. It: enables creation of a claimant’s schedule or a respondent client’s counter-schedule for an unfair dismissal matter performs the statutory and numerical calculations needed to evaluate the worth of the claim generates a clear, structured document detailing the losses sought and the calculation of the overall figure The settings proceed on the basis that: the claimant’s dismissal took place on or after 29 July 2013 the claimant has standing to bring an unfair dismissal claim (see Practice Notes: Entitlement to claim unfair dismissal and Qualifying period for unfair dismissal) the monetary loss arising from the dismissal (eg loss of earnings) is greater than any sums offsetting loss (eg enhanced redundancy payments or income earned in mitigation) Access the tool here: LexisCalculate Employment: Schedule of Loss application. Open it in a Chrome, Edge or Firefox web...

What is the Teachers’ Pension Scheme? The Teachers’ Pension Scheme (TPS) is a statutory public service pension arrangement for members of the teaching profession in England and Wales. Since 1 April 2015, the TPS has consisted of two schemes: The reformed TPS (often described in TPS literature as the ‘2015 Scheme’), established on 1 April 2015 under the Public Service Pensions Act 2013 (PSPA 2013) as a career average revalued earnings (CARE) scheme. This Practice Note concerns that scheme. The legacy TPS, created by the Superannuation Act 1972 (SA 1972) as a final salary scheme for those who joined before 1 April 2015. It closed to future accrual on 31 March 2022, while retaining a final salary link within that scheme. For more, see Practice Note: The legacy Teachers’ Pension Scheme. Separate schemes operate in Scotland and Northern Ireland and are outside the scope of this Practice Note. When the reformed TPS launched, the government acted to close the legacy TPS to...

Much will turn on the exact provisions settled between the parties; for example, whether the essential component of child maintenance was set as a fixed sum with no top‑up payable at the time of the initial order because, at that stage, the payer’s earnings did not cross the relevant threshold. It will also matter whether, when that basic maintenance figure was determined, a 50/50 shared care regime was already in place and operating from the outset. The calculation used in the order appears to mirror the approach endorsed by Mostyn J in CB v KB, particularly at paragraph [49], where he indicated that in any case in which the non‑resident parent’s gross annual income does not exceed £650,000, the starting benchmark should be the output of the formula, disregarding the cap on gross annual income set at £156,000...