The CII J05 March 2025 Exam in Review

In this article, we’re looking at the CII’s Diploma in Financial Planning J05 exam paper that students sat in March – this is the exam on Pension Income Options. This will be useful reading for you if you are preparing to sit this exam in the near future; it will help you to focus your revision on the areas that are likely to be examined.

This article is correct as at 3 June 2025.

You can find a copy of the exam guide here.*  

Two hours are given to answer 15 questions for a total of 130 marks; a pass gives students 20 Diploma credits.

Question 1

Historically, the first question on the J05 paper has always tended to be a lifetime allowance one. With the abolition of the lifetime allowance, the new lump sum allowance now appears to have taken up the mantle.

In this question, we were introduced to Janine, who took early retirement pre-A-day at age 50 with her defined benefit pension scheme and later took flexi-access drawdown. We were asked to calculate her maximum PCLS as things stand and should she apply for a transitional tax-free amount certificate. The CII commented that answers were a mixed bag, with well-prepared candidates scoring highly, but several different mistakes were made regularly.

Question 2

There is also usually at least one question relating to the vesting of a defined benefit scheme in J05 and so it proved again. Question 2 involved Hari, aged 64, who is about to draw his defined benefit pension scheme. He had been offered a fairly miserly commutation rate of 12:1. The question asked us to outline the factors his adviser should take into account when advising him on how much of his income to commute for PCLS. This was a relatively straightforward advice-related question, and the CII stated that it was answered well by most candidates.

Question 3

Next, we met Esme, aged 62, who intended to phase retirement by gradually reducing her working hours until reaching state pension age, when she intends to retire fully. The question asked us to outline five benefits and five disadvantages of drawing an income from her SIPP via phased drawdown. This was answered well by most, but the CII commented that benefits were answered better than drawbacks, with some of the more obvious points regularly missed.

Question 4

Question 4 was about Annie who had recently crystallised her personal pension and used part of the fund to purchase a single life annuity with a 30-year guarantee period. The balance of the fund was placed into flexi-access drawdown. We were asked to outline the death benefits available from both to her children and their tax treatment. Death benefits are covered in every J05 paper, and the CII commented that this was generally answered well, though there were themes evident in the mistakes.

Question 5

In this question, we met Lars, aged 60, who had just retired and required additional income to supplement a small scheme pension. We were asked to justify a recommendation that Lars use a combination of PCLS and taxable drawdown withdrawals to meet this as opposed to a series of UFPLS payments. Comparisons of different vesting options are, again, a regular theme of J05; however, this was an interesting variant on the theme.

This was a tricky little question as the mark scheme gave multiple marks for what appeared to be development of the same points, but then this was an ‘explain’ question which requires a higher level of detail. The CII commented that it was well answered on the whole.

Question 6

This question concerned Celine, aged 58, who was widowed in 2023 and had one child, aged 26, who still lived at home due to a physical impairment. The question required us to outline the factors to consider in determining whether she should take her pension via an annuity or flexi-access drawdown. This was another vesting option comparison type of question and feedback was brief, the CII simply stating that it was well answered by many candidates.

Question 7

Next up, we had a regulatory question, which asked us to outline the factors which the FCA’s Conduct of Business Sourcebook (COBS) stated should be considered when making an income drawdown recommendation. This was only for five marks, but feedback was that some candidates did not perform well and got the rules mixed up with other similar, but different, ones. This was not the end of the world given the marks on offer, but it is always worth candidates for pension exams familiarising themselves with the key sections of COBS.

Question 8

This question was another generic one which related to investment scams. It asked us to identify four methods used by scammers and four steps a financial planning firm could take to protect their customers from them. This has come up regularly in J05 in recent years, and it was therefore no surprise to see feedback that it was answered well by the majority of candidates.

Question 9

Interestingly, this question did not concern pensions directly. Rather, we were introduced to newly widowed Fleur and asked to explain the reasons why she would be eligible for bereavement support payment, how much she would be entitled to, and how long she could claim it for. This was another relatively short question for six marks.

The CII commented that it was not answered well, perhaps understandably as it was rather out of left field for an exam titled Pension Income Options. The topic is covered in the study text, and therefore candidates need to be aware that it could be questioned. However, it perhaps would not have been a core focus for candidates with limited study/revision time.

Question 10

This was a generic financial planning question which covered the factors you would consider when assessing attitude to risk and the drawbacks of relying on risk profiling tools. This is a question which is regularly asked in several financial planning exams. The CII commented that it was disappointing not to see more candidates gaining maximum marks (eight in total) given how important risk profiling is to most areas of pension advice. Whilst expecting 100% might be a bit harsh, this is indeed a core area of financial planning, particularly in the decumulation stage.

Question 11

In this question, we were introduced to Ivan, who had a substantial defined benefit and state pension income which exceeded his needs and a SIPP that he did not plan to touch. We were asked about the benefits of recycling excess income into the SIPP. This was a bit of a curveball question, and the CII  stated that some points were missed.

The marking scheme, in all fairness, appeared rather harsh for this question. One of the points in the model answer being that it ‘does not fall foul of recycling rules’. It is questionable whether this actually constitutes an advantage (as opposed to merely not being a disadvantage). Also, given that he is aged 72, the fact that he can contribute up to the age of 75 would appear more a rule than an actual advantage of making the contributions at this point. Interestingly, the answer also referenced money in the SIPP being free of IHT until 2027.

Question 12

This question related to Norah, who had two deferred defined benefit schemes valued at £20,000 and £250,000. The question surrounded the requirements before the scheme would agree to transfer them. Again, one could argue that the mark scheme did not really reflect the wording of the question. Two marks were available for stating that (for scheme A) the CETV was under £30,000 as therefore she did not need to take advice (which can hardly be described as a step that she must take). However, for scheme B, the answer was more straightforward and simply covered the statutory advice requirement.

Question 13

This question concerned Craig, who was about to retire, pay off his mortgage using his PCLS and take income via flexi-access drawdown to meet his needs. It asked for advantages and disadvantages for two different sustainability strategies – sustainable withdrawal rates and natural income. Again, sustainability is a core element of decumulation advice and interestingly, the feedback was that candidates were able to articulate advantages better than disadvantages.

Question 14

This question was a cashflow modelling one, covering Sasha and Faisal, who were about to retire and wished to take access from their drawdown plans. The question was a two-part one asking candidates firstly to outline how cashflow modelling could be used when advising them on their retirement plans and secondly for five disadvantages of doing so. Cashflow modelling, again, is regularly tested in J05, but this was a tricky way of testing it, so it was good to see the CII comment that it was answered well by many candidates.

Question 15

Last up, we met Mei, an additional rate taxpayer approaching retirement, who was considering the idea of ceasing pension contributions and investing instead into her investment ISA. We were asked to outline the drawbacks of this approach. This offered eight marks and was well answered by better prepared candidates, though the CII commented that some missed out on what it considered easy marks, such as the difference in annual allowance. One of the points was also that the pension was not part of the estate, although unlike Question 11, the answer did not reference that this was due to change in 2027.

Overall, this paper contained a number of the usual staple diets of J05, such as allowances, cashflow modelling, death benefits, and defined benefit schemes. However, the way some of them were asked and the way in which the marks schemes worked potentially made it trickier than usual for candidates to pick up marks.

Comparison with the September 2024 Exam Paper 

Let’s compare this paper with what was tested in September 2024. That exam guide can be found here.* 

The topics covered were:  

• Transitional tax-free amount certificates.
• Pension transfers in poor health
• Death benefit nominations
• Capped drawdown transfers
• Death benefits
• Phased flexi-access drawdown
• Investment pathways
• The Pension Protection Fund (PPF)
• State pension entitlement gaps
• Capacity for loss
• Longevity risk
• UFPLS vs PCLS
• Cashflow modelling and stress testing
• Annual reviews
• UFPLS to fund property purchase

The lump sum allowance now seems to be the hot topic on the agenda for this exam. Death benefits, comparison of vesting options, the PPF, cashflow modelling, risk and state pensions are also a pretty sure bet. Candidates can also be confident that defined benefit schemes will come up in one way or other in most sittings.

Grab the resources you need!

If you’re studying for your CII J05 exam, and you want to be fully prepared, grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the J05 mock paper taster now!

* The CII has updated their retention policy and now only provides the last two exam papers. Older papers referenced in this article may no longer be available on the CII website.