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The Technical Quiz: 17 April

To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions.

The following questions relate to pensions planning.


1. John believes he will be able to retire at age 55 but he is unwilling to increase his rate of pension contributions to make this a realistic possibility. What is the behavioural finance term for this attitude?

A) Cognitive dissonance

B) Clustering illusion

C) Framing

D) Extrapolation bias

2. John says he needs income and has a low tolerance and a low capacity for investment risk. He is thinking of retiring to live in France. Where is the inconsistency in his financial arrangements?

A) John has a with-profit pension annuity and his Isas are invested in blue chip UK shares and non-investment grade corporate bond funds.

B) John has not yet sold his house in London in order to purchase the property in France. He has a cash Isa.

C)John says he can earn his living in France if necessary, but would prefer not to do so. John’s wife Sandra is not sure about the attractions of living abroad.

D) John has a portfolio of invest-ments worth about £450,000. He likes to look after them himself.

3. Many occupational pension schemes offer lifestyling options. What best describes the key advantages of this approach for the scheme member?

A) As risk is actively controlled and members do not have to make difficult decisions, they will have a suitable asset allocation for pension drawdown at retirement.

B) As risk is actively controlled, the member will always have a bespoke asset allocation for their specific needs.

C) As risk is actively controlled, the member will always get the best price on assets purchased.

D) As risk is actively controlled and members do not have to make difficult decisions, they may accept a higher allocation to equities.


Scroll down for the answers

Questions supplied by the CPD Centre


For more help keeping up to date with your technical knowledge go to


1 A

2 A

3 D



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