Context For Pension Planning

Question 1

How are defined contribution schemes used at retirement?

Answer 1

Through annuity or drawdown.

Question 2

What legacy state pension schemes are still in use?

Answer 2

Basic State Pension
SERPS
S2P
Graduated state pension

Question 3

What reasons for people not save in pensions?

Answer 3

Trust
Expensive
Complex

Question 4

What was introduced in 2006
What was introduced in 2015

Answer 4

Introduced pension simplicity 2006 and pension flexibility 2015.

Question 5

Name the 8 key roles

Answer 5

Scheme member
Trustee
Administrator
Practitioner
Dependant
Nominee
Successor
Contributor and Dependant

Question 6

What roles does the government play with pensions

Answer 6

Funder
Tax relief
Regulator

Question 7

How were pensions handled pre April 2006?

Answer 7

Regulations layered on top of each other, leading to different rules depending on when you joined.

Question 8

What 6 reasons are given for people to save into pensions?

Answer 8

Tax relief on way in
Tax-free growth
Upto 25% tax-free on way out for lump sum
Inheritance for death under 75
Removes spending temptation
Contribute from employer

Question 9

What 6 reasons are there not to save into a pension?

Answer 9

Lack of access for emergencies
Annual allowance for tax relief
Amount tax-free at retirement limited
Scandals and lack of trust
Constant rule changes
Complex rules

Question 10

What conditions must be met for an employer to organise independent financial advice and it not be a benefit in kind?

Answer 10

Only related to pensions.
No more than £500 per employee each tax year.
Offered to all employees or all of a certain group of employees.

Question 11

How would advice hired by an employer be taxed if it exceeds £500?

Answer 11

Only on the excess.

Question 12

What was life expectancy in 1997?

Answer 12

80 Male
83 Female

Question 13

What is life expectancy now

Answer 13

83 male
86 female