Friday Five Focus on Pensions – 4 March – 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.

1. 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.

2. With only a few months to live, George’s pension fund is to be commuted for a lump sum. As George is aged 58 and a basic rate taxpayer, the net amount receivable from his £1,768,100 pension fund will be:
   1. £1,385,850.
   2. £1,490,100.
   3. £1,594,350.
   4. £1,768,100.

3. Zaynab wishes to use trivial commutation. She should be aware that: Tick all that apply.
   1. she will not be able to unless she is aged at least 60.
   2. there is a 12-month commutation period.
   3. the commutation limit is £30,000 across all schemes.
   4. all of the resulting proceeds will be tax-free.

4. Saving for retirement through the use of a registered pension scheme provides your client with which of the following incentives?
   1. Half of the fund may be taken as a tax-free cash lump sum.
   2. Benefits available from age 50.
   3. Simplicity and ease of understanding.
   4. Tax relief for the member and any employer.

5. Patryk has numerous sources of income. His financial adviser should be aware that relevant UK earnings for the purposes of investing in a UK registered pension scheme include: Tick all that apply.
   1. income from a trade or profession.
   2. employment overtime and bonuses.
   3. rent from a buy to let property.
   4. income derived from the payment of equity dividends.

Answers

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

2. A – See R04 Study Text, Chp 6/3
   Grab our taster mock exam paper for CII R04. Click here to download.

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

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

5. AB – 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?

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