Pension Basic Calculation: Quiz!

1. If a client requests a review, when will it apply to their pension?

At any point they want

On their Birthday

On their next policy anniversary

On 6th April each tax year

The correct answer is "On their next policy anniversary." When a client requests a review, it will apply to their pension on the date of their next policy anniversary. This means that the review will take effect on the anniversary of when their policy was initially established.

Explanation

The correct answer is "On their next policy anniversary." When a client requests a review, it will apply to their pension on the date of their next policy anniversary. This means that the review will take effect on the anniversary of when their policy was initially established.

2. When can the client request a review?

At any point they want

On their next policy anniversary

On their Birthday

On 6th April each tax year

The client can request a review at any point they want because there are no specific restrictions or limitations mentioned in the question. This means that the client has the freedom to request a review whenever they feel the need for it, regardless of any specific time or event such as their policy anniversary, birthday, or a specific date like 6th April each tax year.

Explanation

The client can request a review at any point they want because there are no specific restrictions or limitations mentioned in the question. This means that the client has the freedom to request a review whenever they feel the need for it, regardless of any specific time or event such as their policy anniversary, birthday, or a specific date like 6th April each tax year.

3. An adviser has requested that we refund contributions back to a client from their pension. Can this be done?

It is not possible to refund contributions back to a client from their pension

It is possible to refund contributions back to the client with no questions asked

Refunding contributions back to a client from their pension is not possible. However, it is possible to refund contributions over and above the client's level of earnings. In order to do so, the client will be asked to write to the company incorporating a special declaration. This suggests that there are certain conditions and procedures that need to be followed in order to refund contributions in excess of the client's earnings.

Explanation

Refunding contributions back to a client from their pension is not possible. However, it is possible to refund contributions over and above the client's level of earnings. In order to do so, the client will be asked to write to the company incorporating a special declaration. This suggests that there are certain conditions and procedures that need to be followed in order to refund contributions in excess of the client's earnings.

4. When can a client top up their pre-A-Day pension?

Never

At any point they want

6th April

On the client's 75th Birthday

A client cannot top up their pre-A-Day pension because pre-A-Day pensions were closed to new contributions after 5th April 2006. Therefore, the correct answer is "Never."

Explanation

A client cannot top up their pre-A-Day pension because pre-A-Day pensions were closed to new contributions after 5th April 2006. Therefore, the correct answer is "Never."

5. How many days prior to a review date can a review be done?

10 days

30 days

60 days

90 days

A review can be done up to 60 days prior to the review date. This means that the review can be conducted anytime within the 60-day period leading up to the scheduled review date. This allows for ample time to assess and evaluate the necessary information and provide feedback or make any necessary adjustments before the actual review date.

Explanation

A review can be done up to 60 days prior to the review date. This means that the review can be conducted anytime within the 60-day period leading up to the scheduled review date. This allows for ample time to assess and evaluate the necessary information and provide feedback or make any necessary adjustments before the actual review date.

6. What was the standard lifetime allowance limit in December 2007?

£1,500,000.00

£1,800,000.00

£1,650,000.00

£1,600,000.00

In December 2007, the standard lifetime allowance limit was £1,600,000.00.

Explanation

In December 2007, the standard lifetime allowance limit was £1,600,000.00.

7. Calculate the standard lifetime allowance usage of the following: IAS states an event date of 01/12/2012 – The Lump Sum (BCE6) is showing as an amount of £9,000.

0.51%

0.23%

0.54%

0.60%

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Explanation

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8. What is the current standard lifetime allowance limit?

£1,800,000.00

£1,250,000.00

£1,500,000.00

£1,600,000.00

The current standard lifetime allowance limit is £1,500,000. This means that individuals can save up to this amount in their pension pots without incurring additional tax charges. Any amount above this limit may be subject to tax charges when withdrawn.

Explanation

The current standard lifetime allowance limit is £1,500,000. This means that individuals can save up to this amount in their pension pots without incurring additional tax charges. Any amount above this limit may be subject to tax charges when withdrawn.

9. David is a 46-year-old plumber who has a pension worth £104,600.00. If he were to request his Tax-Free Cash today, how much would he get?

£0.00

£26,150.00

£20,920.00

£52,300.00

David is a 46-year-old plumber, which means he is not yet eligible to request his Tax-Free Cash from his pension. Typically, individuals can start accessing their pension funds and receive Tax-Free Cash from the age of 55 onwards. Since David is only 46 years old, he would not be able to get any Tax-Free Cash from his pension today, hence the correct answer is £0.00.

Explanation

David is a 46-year-old plumber, which means he is not yet eligible to request his Tax-Free Cash from his pension. Typically, individuals can start accessing their pension funds and receive Tax-Free Cash from the age of 55 onwards. Since David is only 46 years old, he would not be able to get any Tax-Free Cash from his pension today, hence the correct answer is £0.00.

10. David's brother Pat is 60 years old and also has a pension pot of £104,600.00. If he were to crystallize his pension today using a GAD rate of £49.00, what would his maximum GAD income be?

£6,150.48

£4,612.86

£5,125.40

£3,844.05

The GAD income is calculated by dividing the pension pot by the GAD rate. In this case, Pat's pension pot is £104,600.00 and the GAD rate is £49.00. Dividing £104,600.00 by £49.00 gives us £2,134.69. However, there is a maximum GAD income limit, which is 120% of the single-life annuity rate. Since the given answer is £4,612.86, it is likely that this is the maximum GAD income that Pat would receive.

Explanation

The GAD income is calculated by dividing the pension pot by the GAD rate. In this case, Pat's pension pot is £104,600.00 and the GAD rate is £49.00. Dividing £104,600.00 by £49.00 gives us £2,134.69. However, there is a maximum GAD income limit, which is 120% of the single-life annuity rate. Since the given answer is £4,612.86, it is likely that this is the maximum GAD income that Pat would receive.