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

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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

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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
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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
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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
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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
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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
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8
Q

impact on personal allowance

A
  • can also impact adjustd net income
  • gross up and deduct before deciding if over £100k
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