Misc

Question 1

Pensions Act 2007

Answer 1

Legislated for reform to State pension system in light of demographic changes. Increase to SPA. BSP to increase in reference to average earnings and eased qualifying criteria. Introduced NEST.

Question 2

Pensions Act 2008

Answer 2

Introduced measures to encourage private saving. Duty to AE - came in to force in 2012.

Question 3

PSLA states a single person will need how much pa to live?

Answer 3

£10k minimum. £20k moderate. £30k comfortable.

Question 4

PSLA states a couple will need how much pa to live?

Answer 4

£15k minimum. £30k moderate. £45k comfortable.

Question 5

Obstacles to saving

Answer 5

Rise in welfare state removes threat of absolute poverty.
Affordability - Cost of living increase.
Behaviour - prioritising immediate needs
Culture - “credit boom” spend now pay later

Question 6

What did the 2002 Pensions Commission conclude?

Answer 6

Most people do not make rational decisions about long term saving without encouragement and advice. Cost of advice reduces return on saving. “Bewildering complexity” of UK state and private pension system.

Question 7

What are the MaPS 5 goals

Answer 7

Financial foundations - increase number of children with a meaningful financial education.
Nation of savers - encourage regular saving
Credit counts - reduce number of people using credit to pay for food or bills
Better debt advice.
Future focus - ensure people understand enough to plan for retirement