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Friday Five Focus on Pensions – 17 June – 5 Questions in 5 Minutes

Friday Five Focus on Pensions – 17 June – 5 Questions in 5 Minutes

Friday Five Focus on Pensions – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Pensions; this is useful as you prepare for the CII’s R04, AF7, or J05 exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT! These questions relate to examinable tax year 2021/22, examinable by the CII until 31 August 2022. They do not relate to tax year 2022/23 which is only examinable by the CII from 1 September 2022.

  1. Sportsman Joe retires in 2021/22 at the age of 35. Joe’s lifetime allowance will be reduced by what percentage for each complete year before normal minimum pension age?
    1. 10%
    2. 5% 
    3. 2.5%
    4. 1.5%
  1. Evelyn wishes to make a complaint against her former employer in relation to incorrect administration of the occupational pension scheme. Who should she complain to? 
    1. The Pensions Advisory Service 
    2. The Pensions Ombudsman 
    3. The Pensions Regulator 
    4. The Financial Ombudsman Service 
  1. Why might an employee view a contract-based pension scheme as a less valuable benefit than a trust-based pension scheme? 
    1. Basic rate tax relief on contributions is not obtained immediately but instead via self-assessment. 
    2. Early leavers lose employer contributions in the event of transfer within 2 years. 
    3. Because the scheme has been outsourced to a third party and does not provide members with the protection of trustees. 
    4. Because the scheme is unlikely to offer drawdown options at retirement. 
  1. Bob crystallises his two pension plans in the year 2021/22. Based on the information below, what will the lifetime allowance charge be if Bob draws the excess as a cash lump sum?
    Final salary scheme pension of £50,000 plus a tax-free cash sum of £100,000
    Personal pension of £550,000, all of which is being used to purchase an immediate lifetime annuity.
    1. Nil
    2. £144,225 
    3. £317,295 
    4. £454,795
  1. Freyja is hoping to qualify for a new State pension. To do so, she should be aware that she must: Tick all that apply. 
    1. have a minimum of 10 qualifying years to receive any new State pension 
    2. have at least 35 qualifying years to receive a full new State pension 
    3. reach her State pension age on or after 6 April 2016 
    4. have been employed or self-employed for at least 10 years

 

Answers

  1. C – See R04 Study Text, Chp 3
    Grab our taster mock exam paper for CII R04. Click here to download.
  1. B – See R04 Study Text, Chp 4
    Grab our taster mock exam paper for CII R04. Click here to download.
  1. C – See R04 Study Text, Chp 6
    Grab our taster mock exam paper for CII R04. Click here to download.
  1. C – See R04 Study Text, Chp 2
    Grab our taster mock exam paper for CII R04 Click here to download.
  1. ABC – See R04 Study Text, Chp 9
    Grab our taster mock exam paper for CII R04. Click here to download.

 

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

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