Pensions Flashcards
Pat has been employed by Telephonics plc for 35 years and has been a member of the company’s 1/60th pension scheme for the whole period. His salary is now £81,000 and he is due to retire next month. What will his pension entitlement be?
A) 54,000
B) 28,350
C) 47,250
D) 81,000
C) 47,250
Marta is 37 and pays 3 per cent of her salary into a pension each month. The benefit that she will receive at retirement depends solely on the investment performance of the fund. Marta’s pension scheme is:
A) a defined-benefit personal pension.
B) a final salary occupational pension
C) a defined benefit occupational pension
D) a defined contribution occupational or personal pension
D) a defined contribution occupational or personal pension
Explain what is meant by the term lifetime allowance
Lifetime allowance is the maximum amount someone can hold in pension at the point of crystalisation without incurring a tax charge
What rate of tax relief is applied to contributions to an individuals pension plan?
A) basic, higher or additional rate depending upon the contributors marginal rate.
B) always basic rate
C) always higher rate
D) basic, higher or additional depending on the pension providers own rules
A) basic, higher or additional rate depending upon the contributors marginal rate.
Contributions to AVCs are deducted from gross income. True or false?
True
AVC - additional voluntary contributions.
Through employment schemes.
Which of the following statements is correct
An individual may be auto-enrolled in a workplace pension scheme providing:
A) were born in and are currently working in the UK
B) are aged between 18 and 55
C) earn in excess of £10,000 a year
D) are not liable to higher rate tax
C) earn in excess of £10,000 a year
Since April 2015 personal pension providers have been obliged to allow scheme members to access their retirement benefits in the form of an uncrystallised lump sum if the member wishes to do so. True or false?
False.
But they can move their fund to a different provider that does in order to access this benefit
Which of the following in relation to stakeholder pensions is correct?
A) charges must not exceed 2% of the fund
B) there must not be any entrance or exit charges
C) the minimum monthly contribution is £50
D) the maximum contribution is £3,600 per annum in all cases
B) there must not be any entrance or exit charges
John is using an uncrystallised funds lump sum to provide his pension benefits. The amount of each payment he takes that is free of tax is:
A) 50%
B) 100%
C) 25%
D) nil
C) 25%
What previous form of income drawdown was converted to flexi-access drawdown from 6th April 2015?
Flexible draw down arrangements were all converted to FAD
Nicky is 60 years old and has a low appetite for risk. She is considering options for taking benefits from her pension fund and would like to be able to receive a guaranteed income, with her pension fund no longer exposed to any investment risk. Which method of providing retirement benefits should Nicky take?
Annuity provides a guaranteed income and there is no investment risk, so this would be a suitable option for Nicky.
