BTS App Paper 1 Flashcards
What are the two types of risks associated with DC schemes saving for retirement income?
Investment risk
Annuity risk
BTS A 1
The UK government is facing an increasing struggle in relation to state pension provision to individuals. The current pensions crisis is primarily due to…
a decreasing pool of pay as you earn
(PAYE) payers.
BTS A 1
Charles reached state pension age in 2015. He has one element to his state pension payments. This must mean that Charles…
was self-employed throughout his working life.
Self-employed individuals did not participate in earnings-related state pensions historically, therefore Charles would only be receiving the basic state pension, under old rules.
You pay £40k into pension (within your AA to begin with). Then, your earnings turn out to be only £35k for the year. What happens to the £5k?
There will be a marginal rate tax charge (20% in this case) levied on this excess,
the £5,000 can remain in the personal pension.
Note: this is not an unauthorised payment
If you auto enrol into a new scheme whilst having Enhanced protection, how long do you have to leave the scheme before you lose the protection?
30 days
How much is the unauthorised payment charge?
40% income tax (+ 15% in some cases)
Is buying residential property an unauthorised payment?
Yes
Is exceeding AA an unauthorised payment?
No
What is the tax on exceeding your Annual Allowance?
Marginal rate
What types of income are off limits to a trustee in bankuptcy?
State pension
Guaranteed Minimum Pension benefits
Registered Pension Scheme. The Scheme admin must be:
Approved by the FCA.
True/False?
False
Registered Pension Scheme. The Scheme admin must be:
Registered with TPR
True/False?
False
Registered Pension Scheme. The Scheme admin must be:
Independent of the sponsoring employer
True/False?
True
How long do you have to wind up a pension scheme?
2 years (“A timely fashion”)
Who is responsible for the periodic pension scheme asset valuations?
The scheme actuary
