Friday Five Focus on Pensions – 17 May – 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 2023/24, examinable by the CII until 31 August 2024. They do not relate to tax year 2024/25 which is only examinable by the CII from 1 September 2024.

1. Nigel, age 66, had been in flexi-access drawdown for 18 months when he died suddenly in June 2023. Nigel was a basic rate taxpayer in the year of death. The death benefit is £50,000. If his widow, Debbie, a higher rate taxpayer, decides to take this as a lump sum, what is the net amount she will receive?
   1. £27,500
   2. £30,000
   3. £40,000
   4. £50,000

2. Members with safeguarded benefits have a statutory right to request a CETV once in every
   1. 3-month period.
   2. 6-month period.
   3. 12-month period.
   4. 18-month period.

3. Jack’s annuity has been calculated on a points system using an automated basis in relation to his lifestyle. This would indicate the purchase of
   1. an enhanced annuity.
   2. a joint life annuity.
   3. a protected rights annuity.
   4. an impaired annuity.

4. James, aged 29, was nominated by his uncle as the beneficiary of his occupational defined contribution pension scheme upon his death. Which of the following death benefit options will NOT be available to James?
   1. Scheme pension.
   2. Lifetime annuity.
   3. Flexi-access drawdown.
   4. Lump sum.

5. Jim crystallised benefits from a personal pension five years ago and took a PCLS together with flexi-access drawdown income. During the current year, he has paid a gross amount of £15,000 into his SIPP and has also accrued £25,000 worth of defined benefit input. The £25,000 will be tested against the
   1. standard annual allowance.
   2. money purchase annual allowance.
   3. tapered annual allowance.
   4. alternative annual allowance.

Answers

1. D – See R04 Study Text, Chp 3
   Grab our taster mock exam paper for CII R04. Click here to download.

2. C – See R04 Study Text, Chp 5
   Grab our taster mock exam paper for CII R04. Click here to download.

3. A – See R04 Study Text, Chp 7
   Grab our taster mock exam paper for CII R04. Click here to download.

4. A – See R04 Study Text, Chp 3
   Grab our taster mock exam paper for CII R04. Click here to download.

5. D – See R04 Study Text, Chp 2
   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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