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Pension Income Options (J05)

Pension Income Options (J05) develops knowledge and understanding of pension crystallisation and the drawing of income via various options.

The default Enrolment option for this unit includes:

  • Latest version of the core learning content, in digital format only.
  • Assessment entry.

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Pension Income Options (J05) begins by looking at the HMRC rules that apply when pension benefits are crystallised. It considers in detail the features, tax treatment and risks of lifetime annuities and scheme Pensions.

The study text then looks at the features, tax treatment and risks of flexible benefit options and phasing retirement benefits. It considers the regulatory requirements and legal framework designed to protect clients who are drawing pension benefits;

It considers the State retirement benefits available and then looks at the issues in giving initial and ongoing advice on taking pension benefits to clients.

Building a successful career in personal finance

Pension Income Options (J05) is suitable for anyone seeking to build their knowledge and understanding of pension income options. This unit counts towards the Diploma in Financial Planning, suitable for paraplanners, technical consultants and those supporting financial planning processes, in particular those who already hold CII credits that count towards completion (otherwise, the Diploma in Regulated Financial Planning is more suitable).

Purpose

At the end of this unit, candidates should be able to demonstrate an understanding of the:

  • the process and implications of decumulating pension funds and the issues facing clients and advisers;
  • decumulation options available to members of pensions schemes;
  • features, risks and tax treatment of the different options.

Assessment

  • 2 hour exam
  • Written short answer questions
  • The nominal pass mark is 55%
  • The 2020 pass rate for this unit was 88%

Study material - editions available

Applicable to Apr and Oct exams within a 12-month enrolment period.