Business Bookelet B
Define National Savings & Investments.
Is a government backed organisation that offers secure saving option.
Advantages of National Saving & Investments
Offers ISA's, Premium Bonds
Secure
Disadvantages of National Savings & Investments
1. Poor Interests Rates
2. Have to give notice on withdrawls
Define Insurance Companies
Protects people against loss in return for monthly premium.
Advantages of Insurance Companies
1. Protects against unexpected losses
2. Monthly so you can budget
Disadvantages of Insurance Companies
Additional Fees
Lots of terms and conditions.
Define payday loans
Businesses offer short term loans to people between to people between paydays.
Advantages of Payday loans.
Quick way of getting cash.
Disdvantages of Payday loans.
Interest is very high, lead to deeper debts.
Define Pension Companies
Businesses that sell policies to customers to save into personal schemes to prepare to retire.
Advantages of Pension Companies
Tax Benefits
Structured way to plan
Disadvantages of Pension Schemes
Cannot access money until agreed term.
Poor investments decisions cause poor returns.
Define Pawnbrokers
Loan money to individuals & secure loan against asset.
Advantages of Pawnbrokers
Quick way of getting cash.
Disadvantages of Pawnbrokers
1. Pawned items not brought back within. a certain time may be sold
2. Wont lend you full value of the asset.
What is the Bank of England?
Is the central bank of the united kingdom
Advantages of the Bank of England.
Ensures the financial stability of the uk
Sets interest rates
Disadvantages of the Bank of England
Doesnt lend to the general public
Can raise interest rates making borrowing expensive.
What are banks?
Handles financial transactions & stores money on behalf of the general public.
Advantages of a Bank
Reliable
Secure
Private
Disadvantages of banks
May charge for certain accounts&services.
Savings are only protected up to £85,000.
What are builiding socitiets?
Provide financial services but owned by members.
Advantages of building societies.
Offer better interest rates & savings then banks
Disadvantages of Building Societies
Fewer branches meaining less access.
What are Credit Unions?
Member owen financial cooperative providing them credit at competitive rates.
Advantages of credit unions
Easy & Convient way to save and borrow money
Offer very low cost loans.
Disadvantages of Credit Unions
Savings only protected up to £85,000
Lack business drive
Membership required.
What is a Bank Branch?
Physcial place where financial transactions are carried out face to face.
Advantages of Bank Branch.
Easy and direct information
Can put in and withdraw cash.
Get advice from staff
Disadvantages of branch banks
Limited to branch hour
Have to travel to get there
what is Telephone Banking?
Carrying transatcations over the phone
Advantages of Telephone banking.
24/7
Advice & other services
Check Balance
Disadvantages of Telephone banking.
Automated systems may be confusing
Risk of fraud.
What is mobile banking?
Managing bank account through app on mobile device.
Advantages of mobile banking.
24/7
Easy to use
Transfer, check balance
Disadvantages of mobile banking
Security Concerns
Cant withdraw money
What is online banking?
Managing your account via a computer/laptop via the internet
Advantages of Online banking.
24/7
Transfer money, Check Balance
Disadvantages of online banking
Cant pay in/withdraw
Risk of forgetting passwords
Risk of fraud
What is postal banking?
Paper based financial transactions
Advantages of postal banking
Useful for customers that don't do online banking
Useful if banks too far away
No technology required
Disadvantages of postal banking
Takes longer
Risk of post getting lost
What does Financial Conduct Authority (FCA) do?
Regulates the conduct of financial service providers
Funded by the organisations it regulates.
What is Financial Services Compensation Scheme (FSCS)?
An organisation that pays compensation to consumers when financial service provider is unable to.
Covers claims against businesses authorised by the FCA.
What is Financial Ombudsmen Service (FOS)?
Made by government to protect and represent consumers who are in disputes with financial service providers.
what is Consumer legislation?
Regulates credit card purchases & gives consumers protection when signing loans and hire purchase agreements.
What is Office of Fair Trading?
Responsible for protecting consumer interest.
What is does Citizens Advice do?
A chartible organisation which provides advice on financial/non financial issues
Advantages of Citizens Advice.
Free
Covers a wide range of areas
Face to face or Online
What are Independant Advisors?
Proffessional individuals provide independant advice on a range of financial products.
Advantages of Independant Finanacial Advisers
No commission
Advice on Mortgages & Pensions
Disadvantages of Independant Financial Advisors
Charge fees
Dependant on quality
What are Price Comparison companies?
Compare the price of goods and services from a range of companies.
Advantages of Price Comparison websites
Free
24/7
Saves you money
Personalised
Disadvantages of Price Comparison Websites
Requires computer
Could be bias
What are Debt Counsillers?
Specialist agencies/individuals who provide financial adivce to individuals struggling with debt.
Disadvantages of Debt Counsillers
Just focus on debt
Some charge a fee
Advantages of Debt Counsillers
Professionals
Authorised by the FCA
What are Independant Voluntary Arrangments (IVA)
An agreement with your creditors to pay all or part of your debts.
Advantages of Individual Voluntary Arrangements
Independant Advice
Helps manage debt
Disadvantages of Individual Voluntary Arrangments
Fee
Impact on credit rating
Defination of Bankruptcy
Legal process through which people cannot pay their debts.
Advantages of Bankruptcy
Debt normally written off
Disadvantages of Bankruptcy
Assets repossessed
Diffucult to borrow
Stays on report for 7-10 years
What is a money advice service?
Government agency provide free money advice.
Advantages of Money Advice Service
Online tools
Free
Webchat facility
Disadvantages of Money Adivce Service
Requires computer
Online tools may be confusing to use