Pensions Flashcards
1
Q
defined benefits scheme
A
benefits payable to members are calculated by reference to the member’s earnings or length of service
2
Q
money purchase scheme
A
benefits payable to members calculated by reference to the size of the pension fund built up during the member’s working life
3
Q
Registered pension schemes examples
A
- occupational pension scheme set up by employer
- public service scheme established by government for public sectors
- personal scheme established by an insurance company
4
Q
Tax relief for contributions by scheme members
A
- given on contributions up to a max amount
- greater of 100% of individuals earnings or £3,600
- no provision to carry contribution back or forth previous years
5
Q
net pay arrangement
A
- method of giving tax relief
- employee’s pension contributions are deducted from the employee’s pay before operating PAYE
6
Q
tax relief for personal pension scheme
A
- contributions generally paid net of 20%, giving tax relief at basic rate
- basic and higher rate limit are increased by gross amount, giving further tax relief to those who pay tax at rates above basic rate
7
Q
tax relief for contributions by employers
A
- deductible when calculating trading profits for the period they’re paid
- for large increases between two periods, contributions can be spread over several periods
8
Q
impact on personal allowance
A
- can also impact adjustd net income
- gross up and deduct before deciding if over £100k