R04 Demographic trends and longevity: free practice questions

1. Question 1 of 5

   In recent years, which age group has shown the fastest population increase in the UK?

   Option A: People aged 85 and overOption B: People aged from 50 to 64Option C: People aged under 16Option D: People aged 65 to 75

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   The answer is A: People aged 85 and over

   The 85-and-over group is growing fastest and is projected to nearly double between 2022 and 2047.

   Why the other options are wrong

   B

   The 50 to 64 group isn't the fastest-growing.

   C

   The under-16 share of the population isn't growing fastest.

   D

   The 65 to 75 group is growing, but not as fast as the 85-plus group.

2. Question 2 of 5

   For working out the cost of providing a pension, which life expectancy measure matters most?

   Option A: Life expectancy at birth for the whole of the UK populationOption B: The number of centenarians in the population each yearOption C: The average age at which people in the UK stop workingOption D: Expected remaining lifetime from an age such as 65

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   The answer is D: Expected remaining lifetime from an age such as 65

   A pension is paid from retirement onwards, so expected lifetime from that age drives the cost far more than life expectancy at birth.

   Why the other options are wrong

   A

   Life expectancy at birth includes deaths at young ages and says less about how long a pension is paid.

   B

   Centenarian numbers are a headline statistic, not the cost driver.

   C

   Retirement age is relevant, but the key measure is expected lifetime from that age.

3. Question 3 of 5

   Which is a likely reason for the recent strong growth in annuity purchases?

   Option A: Pension funds coming into the IHT estate from April 2027Option B: A new legal requirement to buy an annuity by age 75Option C: Falling annuity rates encouraging people to lock in nowOption D: The abolition of drawdown for anyone retiring after 2024

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   The answer is A: Pension funds coming into the IHT estate from April 2027

   Higher rates, fewer people retiring with DB pensions who still want a secure income, and pensions coming into IHT from April 2027 have all boosted annuity sales.

   Why the other options are wrong

   B

   There's no requirement to buy an annuity at 75.

   C

   Rates have risen, not fallen, which has helped sales.

   D

   Drawdown remains available to new retirees.

4. Question 4 of 5

   Darren, 65, plans to draw down his fund assuming he will live to his average life expectancy. What is the main risk with this approach?

   Option A: HMRC will tax the remaining fund at 55% when he reaches that ageOption B: His fund must be annuitised once he passes the average ageOption C: He may well live beyond the average and run out of incomeOption D: His State Pension will stop if he outlives his life expectancy

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   The answer is C: He may well live beyond the average and run out of income

   Average life expectancy means many people live longer. A plan built to the average leaves a real chance of outliving the fund.

   Why the other options are wrong

   A

   There's no tax charge triggered by reaching average life expectancy.

   B

   There's no rule forcing annuitisation at any age.

   D

   The State Pension is paid for life.

5. Question 5 of 5

   What has happened to the number of people aged 100 or over in the UK since 2004?

   Option A: It has increased by about 10%Option B: It has stayed broadly levelOption C: It has fallen slightlyOption D: It has more than doubled

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   The answer is D: It has more than doubled

   There were about 16,600 centenarians in 2024, more than double the number in 2004.

   Why the other options are wrong

   A

   The rise is far more than 10%.

   B

   The number has risen sharply, not stayed level.

   C

   The number has risen, not fallen.

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