5 free questions on Stakeholder pensions, part of learning outcome 5 (Defined contribution schemes). Pick an answer to check it, or open the answer to see why each option is right or wrong.
Question 1 of 5
What is the highest minimum contribution a stakeholder pension may require?
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The answer is D: £20
A stakeholder scheme can't set its minimum contribution above £20, and must accept contributions at any frequency.
Why the other options are wrong
A
£100 is above the limit.
B
£50 is above the limit.
C
£10 is lower than the limit, which is £20.
Question 2 of 5
What is the maximum annual charge for someone who joined a stakeholder pension in 2010?
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The answer is D: 1.5% for ten years, then 1%
For members from 6 April 2005, the cap is 1.5% for the first ten years then 1%. Earlier joiners have 1%. Auto-enrolment use brings in the 0.75% cap.
Why the other options are wrong
A
0.75% applies where used for auto-enrolment.
B
The charge must fall to 1% after ten years.
C
1% throughout applies to pre-2005 joiners.
Question 3 of 5
How can a stakeholder provider charge for extra services such as drawdown?
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The answer is B: Only as an optional service under a separate contract
The capped charge covers normal costs. Extras must be optional, under a separate contract setting out the charges.
Why the other options are wrong
A
Extras can't be added to the capped charge.
C
They can't be charged to everyone.
D
Extra services can be offered optionally.
Question 4 of 5
Which body keeps a register of stakeholder schemes and regulates their registration?
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The answer is B: The Pensions Regulator
TPR registers stakeholder schemes; the FCA regulates marketing, advice and fund managers; HMRC registers them for tax.
Why the other options are wrong
A
The FCA regulates marketing and advice.
C
The PPF has no role.
D
HMRC registers them as pension schemes for tax.
Question 5 of 5
Which condition applies if a stakeholder pension offers a with-profits fund?
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The answer is D: The fund can't contain non-stakeholder assets
With-profits is allowed, but the fund can't include non-stakeholder assets and must be used only to provide members' benefits.
Why the other options are wrong
A
No bonus guarantee is required.
B
It can accept new money.
C
The default must be lifestyled.
Practise all 10 Stakeholder pensions questions
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