The CII pensions unit had a countrywide pass rate of 61% in the 2020 calendar exam year. This is a unit that requires a minimum of 50 study hours and gives candidates 10 CII credits towards the regulated DipFS, but don’t let this fool you. Our years of experience coaching and supporting this unit have shown that most candidates will need more than the minimum study hours, and nearly all will come away baulking at the meagre 10 credits for the effort required (it should be worth more in our opinion!). So, what are the top five reasons for this paper hitting the charts as the exam with the lowest national pass rate in 2020?
When HMRC came up with the phrase ‘pension simplification’ they were clearly having a chuckle! The changes brought in through the annual Finance and Pensions Acts, might have been intended to make pensions simpler, but there are still so many different rules associated with different pension policies, regimes, caps, valuation factors, tests, death benefits, state pensions and ages, only a real pensions technician would dare to say this was simple.
As an example, the annual allowance charge – one of the caps introduced in 2006 in an attempt to simply pensions, started off relatively simple, acting as a cap on annual defined contribution (DC) pension contributions and defined benefit (DB) benefit accrual. If the cap was breached a tax charge was triggered at the individual’s marginal rate, known as the annual allowance charge. Additional tweaks and changes brought in by successive Chancellors such as carry forward, tapering of the annual allowance and the cherry on its cake, the Money Purchase Annual Allowance (known in less respectful circles as More Pain for Advisers and Administrators), have muddied the waters somewhat!
From your AA to your LTA, from the AAA to the MPAA, RPSs, PPS, SSASs, SIPPS and RACs to name a few there. Have you ever come across a subject that has more abbreviations than pensions? Keeping track of what they each stand for is tricky enough without having to remember how they each work! Check out the BTS R0 glossary, available as a free pdf, to help you keep all your abbreviations in one place.
To pass the CII R04, the examiner expects candidates to have a firm knowledge of not only the current rules, but some of the old rules as well! For example, simplification of the state pension came in from 6 April 2016, yet the R04 exam papers still contain questions on Category B basic state pensions, old deferral rules, how savings credit works etc.
Pension legislation is generally introduced via annual Pension and Finance Acts. This leads to so many different dates relating to when each change to pension rules came in. For example, inflation proofing of pensions, evaluation pre-retirement and escalation in retirement. Both have minimums that DB schemes must usually adhere – so CPI capped at 5% and/or 2.5%. But the year this minimum fell is DIFFERENT for revaluation and DIFFERENT for escalation.
Long question stems, use of double negatives, grids and tables; all of which make deciphering the questions tricky. Candidates need to develop the skill of identify key question information and words that are ‘exam fluff’ before they can even begin to apply their knowledge to the question asked.
“Such an amazing R04 workshop! I wish I had known about this for my previous R0 exams. It’s made a tricky subject a lot more understandable. Thank you BTS.” Helen Ballantyne | Personal Wealth Support | March 2021
“So pleased to have passed my R04 exam this morning first time with 82%. A huge thank you to Bespoke Training Solutions Ltd who provided a fantastic two day R04 workshop as well as their study guides and study app. Their resources made a huge difference to my revision, and overall understanding. One more to go until I am qualified!” India Johnston | Paraplanner | March 2021
“I cannot thank you enough for all of your help! It really gave me another outlook on the R04 exam. I felt so much more confident going into the exam than I have done going into all the previous exams.” Jack Furnell-James | Paraplanner | March 2021
“I am totally thrilled that I have passed another R0 exam with the help of BTS. I have used their Study Buddy app for every exam that I have done. I just did the R04 exam and questions were so similar to the exam so this resource is a must!! I also purchased the Study Guide for this exam. When reading the CII study text my head was all over the place, the BTS R04 study guide explained things so easily for me. I only had to read something once to understand. I cannot recommend BTS enough. I have done
“Such an brilliant two days – thank you! I wish I had known about this for R02 and R03! It made the tough subject of Pensions a lot more understandable and easier to learn!” Shannon Stazicker | Client Services Manager | March 2021
“It was an absolutely brilliant and invaluable 2 days! Luiza not only makes it fun, but makes everything much more understandable with worked examples and ‘real life’ exam questions. I’m thankful to have attended and think I’ll be using BTS for my future exams!! I never imagined a R04 workshop to be so engaging! The 2 days flew by. Thank you BTS.” Laura Milroy | Compliance and Training Manager | March 2021