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Pension Products Quiz

Comprehensive quiz covering pension schemes, tax relief, retirement options, and regulatory requirements for pension planning and retirement income.

Topics Covered: Defined benefit vs defined contribution schemes, auto-enrolment, tax relief, annual allowances, lump sum allowances, annuities, drawdown, SIPPs, and stakeholder pensions.

This quiz is specifically designed for pension specialists, financial advisers, and individuals preparing for pension and retirement planning examinations.

Pension products quiz, defined benefit, defined contribution, auto-enrolment, tax relief, annuity, drawdown, SIPP, retirement planning

Pension Products Quiz

1. What is the primary purpose of tax reliefs on pension contributions?

A. To reduce the overall tax burden on employers.
B. To encourage people to save for retirement.
C. To increase the state pension fund.
D. To provide immediate income to pensioners.

2. Which of the following is a characteristic of a defined-benefit pension scheme?

A. The benefits depend on investment performance.
B. The pension amount is managed by the employer.
C. Contributions are made only by the employee.
D. The employer guarantees a specific pension amount.

3. What is the current minimum pension age for accessing retirement benefits in the UK?

A. 50
B. 55
C. 60
D. 67

4. Which of the following is true about auto-enrolment into workplace pensions?

A. Employees must be aged 22 or over and earn more than £10,000.
B. It applies only to employees earning over £50,000.
C. It is a legal requirement for all full time employees.
D. Employees can opt out before being enrolled.

5. What is the maximum tax-free lump sum someone can take from their pension under the Lump Sum Allowance?

A. £100,000
B. £268,275
C. £500,000
D. £1,073,100

6. Which of the following is a feature of a stakeholder pension?

A. Charges can exceed 2% of the fund value.
B. Entry and exit charges are permitted.
C. The minimum contribution cannot be more than £20.
D. It is only available to higher-rate taxpayers.

7. What happens to the annual allowance if an individual starts accessing their pension via flexi-access drawdown?

A. It increases to £100,000.
B. It remains unchanged.
C. It is replaced by the Money Purchase Annual Allowance.
D. It is recalculated annually.

8. Which of the following is a key difference between AVCs and FSAVCs?

A. AVCs are made from taxed income, while FSAVCs are made from gross income.
B. AVCs are deducted from gross income, while FSAVCs are made from taxed income.
C. AVCs are only available to self-employed individuals.
D. FSAVCs are managed by the employer.

9. What is the main advantage of an annuity purchase?

A. It provides flexibility in accessing pension funds.
B. It is tax-free.
C. It allows for continued investment growth.
D. It offers a guaranteed income for life.

10. Which of the following is a feature of a Self-Invested Personal Pension?

A. It restricts investment options to conventional pension funds.
B. It allows access to a wider range of investments, such as direct shareholdings.
C. It is only available to employees of large corporations.
D. Premiums are charged similar to the insurance industry.

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