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Friday Five Focus on Pensions – 23 April – 5 Questions in 5 Minutes

Friday Five Focus on Pensions – 23 April – 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 2020/21, examinable by the CII until 31 August 2021. They do not relate to tax year 2021/22 which is only examinable by the CII from 1 September 2021.

  1. At retirement, Bernice decides to buy a With Profit annuity. She selects an anticipated bonus rate of 5%. The same year, the provider declares a bonus rate less than this figure. The effect this has on the level of annuity payment she receives is that it will:
    1. increase after 12 months.
    2. decrease immediately.
    3. decrease the following year.
    4. have no effect.
  1. Sacha has several personal pension plans with small fund values. Which of the following rules apply if Sacha takes them as small pots payments? Tick all that apply.
    1. He can take a maximum of three small pots payments from non-occupational schemes.
    2. He can take an unlimited number of small pots payments from non-occupational schemes.
    3. Small pots payments must be less than £10,000.
    4. Sacha must be over the age of 50 to commute his pension benefits for a lump sum.
  1. The Pension Protection Fund (PPF) was introduced to provide default protection for whom?
    1. Employees who are members of defined benefit schemes
    2. Pensioners retiring on an inadequate level of benefits
    3. Anyone who had elected to opt out of earnings-related State benefits
    4. Anyone who has been mis-sold a pension product
  1. Frank’s pension complaint has been accepted by the Financial Ombudsman Service for investigation because Frank believes:
    1. his State Pension forecast is incorrect.
    2. his pension plan was ill-advised at inception 10 years ago.
    3. he was wrongly advised to transfer his pension.
    4. the information received from the trustees of his DB scheme is wrong.
  1. Sam is looking at ways of investing for retirement that will NOT involve pension plans. Since he only wants to invest in areas where tax relief is available to him, you make recommendations to consider: Tick all that apply.
    1. Venture Capital Trusts.
    2. Equity ISAs.
    3. Buy to let properties.
    4. Seed Enterprise Investment Scheme.

 

Answers

  1. C – See R04 Study Text, Chp 7
    Grab our taster mock exam paper for CII R04. Click here to download.
  1. AC – See R04 Study Text, Chp 7
    Grab our taster mock exam paper for CII R04. Click here to download.
  1. A – See R04 Study Text, Chp 1
    Grab our taster mock exam paper for CII R04. Click here to download.
  1. C – See R04 Study Text, Chp 4
    Grab our taster mock exam paper for CII R04 Click here to download.
  1. AD – See R04 Study Text, Chp 10
    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?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.

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