Taxation, Costs and Legislative Position for Auto Enrolment Pension Schemes


As an independent financial adviser (IFA), you have been approached by one of your clients who is the managing director of a business which employs 200 people. He has asked you to provide him with a report regarding how he should proceed with providing an auto-enrolment pension scheme for his company’s employees. The managing director has admitted that he had intended to deal with this issue for a number of months, but has not taken any action as yet. The company’s staging date will be in January 2017. The managing director admits that the company has not been very interested in employee benefits in the past, and would now like to consider the firm’s options in other areas. That is, not just limiting any action now to providing an auto-enrolment pension scheme, but also considering other forms of employee benefits. The firm has no other employee benefits in place, except for a stakeholder pension scheme. Approximately 5% of employees contribute to this, but there is no employer contribution at present.

The managing director would like a full report on all of the above that includes comprehensive details regarding taxation, as well as the costs and legislative position for auto-enrolment pension schemes.

Short Answer Questions

Question 1

Terry, aged 78, is single and has no close relatives. He is reviewing his long term care planning options and is considering the various forms of equity release that are available.

List the advantages of Terry taking out a full home reversion plan rather than an interest-only lifetime mortgage.

Question 2

George, aged 45, has an investment portfolio which comprises a small number of OEICs which invest in different asset classes.

Outline why it might be appropriate for George to have his portfolio rebalanced annually.

Question 3

State the reasons why an additional rate taxpayer should consider investing in an offshore assurance bond, rather than a unit trust.

Question 4

Chelsea is self-employed, aged 30 and single. She has recently taken out a mortgage for the first time, to buy her own residential property in the UK. She has no financial protection arrangements.

State the advantages and disadvantages of her taking out an income protection policy, when compared with a critical illness insurance policy.


This question belongs to finance and discusses about a report regarding how to proceed with providing an auto-enrolment pension scheme for a company’s employees.

Word count: 2289


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