<h2>Year's Maximum Pensionable Earnings (YMPE)</h2>
<p>The Year's Maximum Pensionable Earnings (YMPE) is the upper limit on earnings that are subject to National Insurance contributions in the UK. It is a key figure for understanding how much you can contribute to your pension and how much state pension you might receive.</p>

<h2>How It Works</h2>
<p>The YMPE is set by the UK government and changes annually. For the 2021/22 tax year, it is £50,270. Here's how it works:</p>
<ul>
  <li>If you earn above the YMPE, you don't pay National Insurance on the amount above this threshold.</li>
  <li>However, your state pension is calculated based on your National Insurance record, which is only built up on earnings up to the YMPE.</li>
</ul>
<p>For example, if you earn £60,000 in the 2021/22 tax year, you will pay National Insurance on £50,270 of your earnings, but your state pension will be calculated based on the full £60,000.</p>

<h2>Why It Matters for Traders</h2>
<p>YMPE is relevant to traders in several ways:</p>
<ul>
  <li><strong>Pension Contributions</strong>: If you're a self-employed trader, you can only make pension contributions up to the YMPE to receive tax relief.</li>
  <li><strong>State Pension</strong>: Your state pension is calculated based on your National Insurance record, which is only built up on earnings up to the YMPE.</li>
  <li><strong>National Insurance</strong>: You only pay National Insurance on earnings up to the YMPE.</li>
</ul>

<h2>Example</h2>
<p>Let's say you're a self-employed trader earning £70,000 in the 2021/22 tax year. You can make a pension contribution of £50,270 and receive tax relief on this amount. However, your state pension will be calculated based on the full £70,000 of earnings.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>The YMPE is the upper limit on earnings that are subject to National Insurance contributions.</li>
  <li>You only pay National Insurance on earnings up to the YMPE.</li>
  <li>Your state pension is calculated based on your National Insurance record, which is only built up on earnings up to the YMPE.</li>
  <li>If you're self-employed, you can only make pension contributions up to the YMPE to receive tax relief.</li>
</ul>