So you think you know about Pensions!

No. of Questions= 10

1. 

Payments of pension from a Personal Pension are

a)

not taxable provided no tax free cash has been taken;

b)

subject to basic rate tax only

c)

subject to higher rate tax only

d)

treated as earned income and subject to basic and higher rates of taxes where appropriate

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2. 

What is the maximum percentage of salary which an employer may pay as a contribution to an occupational pension scheme?

a)

The maximum contribution relates to the benefits to be provided

b)

15%

c)

17.5%

d)

Zero

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3. 

Mr Brights pays 4% of his salary towards the company pension scheme. What % of his total remuneration can he contribute to an AVC?

a)

5%

b)

9%

c)

10%

d)

11%

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4. 

Who is entitled to a full basic state pension?

a)

Everyone who has reached state retirement age

b)

Everyone who has reached state retirement age and who has paid the required contributions

c)

Only those who have been employed and have paid the required contributions

d)

Everyone who has paid National Insurance contributions

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5. 

David James works for a small engineering company. His employers are contributing £100 per month to an executive pension scheme. What type of scheme is this?

a)

Personal pension

b)

Defined benefits

c)

Money purchase

d)

Final salary

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6. 

Which of the following is true of a Final Salary Scheme?

a)

The contributions automatically rise in line with the Retail Prices Index

b)

The benefits payable are known when the member enters the scheme

c)

The contributions rise in line with the average earnings index

d)

There is no need to review the premiums

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7. 

What is the maximum premium amount that can be used to provide life cover under a new personal pension?

a)

5% of net relevant earnings

b)

10% of the contribution

c)

25% of earnings

d)

10% of net relevant earnings

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8. 

How much is the earnings cap in 2004/05?

a)

£97,200

b)

£99,000

c)

£102,000

d)

£100,000

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9. 

What is the maximum tax free cash which can be taken from a personal pension plan effected today?

a)

1.5 times final earnings

b)

£150,000

c)

2.25 times the policyholder's starting pension

d)

25% of the accumulated fund, excluding protected rights

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10. 

What is the earliest age at which benefits can normally be taken from a personal pension?

a)

60

b)

55

c)

50

d)

65

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REMEMBER You should not use any information contained on this page as the basis of any action until you have discussed matters with your financial adviser.