10. Pension Products

Question 1

Lifetime allowance

Answer 1

£1,073,000

if it exceeds 25% is taken on income
55% taken on lump sum

Question 2

Money Purchase annual allowance MPAA

Answer 2

£4,000

taking from uncrystalsed funds

Question 3

Defined Benefit scheme

Answer 3

Balance over and above tax free must provide an income

Question 4

Defined-contribution scheme

Answer 4

Balance once tax free cash has been taken can be used to provide income I the form of annuity or flexible access drawdown

Question 5

Annual allowance

Answer 5

£40,000

Maximum amount which can be contributed to a pension annually without charge

Question 6

Pension commencement Lump sum

Answer 6

25%

Amount that can be taken at retirement tax free

Question 7

Voluntary contribution schemes

Answer 7

Additional - limited choice of funds , tax free deducted on gross

Freestanding additional - more investment options done privately

Question 8

Self Invested Personal pension (SIPP)

Answer 8

Investment options

Question 9

Stakeholder pension

Answer 9

encourage low earners to contribute

charges can not exceed 1.5%
entry and exit charges do not exist
Minimum can’t exceed £20