5.4 The social environment Flashcards
Full social inclusion definition
A situation in which all members of society can participate fully in decisions that affect them
Reasons people can be excluded:
- Disability
- Language difficulties
- Poor basic skills
- Live in a deprived area
Financial exclusion definition
The inability to access even the most basic financial services
What is the first sign that someone is financially excluded?
They do not have a bank current account
Government initiatives aimed at promoting social inclusion:
- Money Advice Service
- Basic bank accounts (all banks obliged to offer)
What does the basic bank account provide?
Simple banking facilities without allowing the customer to get into debt
Ways in which financial services providers can support financial inclusion:
- Provide products aimed at financially excluded
- Provide information in a way that is accessible to everyone
- Promoting financial inclusion through education
What does the way in which a provider supports financial inclusion depend on?
- How the issue fits in with the provider’s values and branding
- How it impacts profitability
Why is offering services to financially excluded customer not economically viable for the provider?
- Their few small transactions cost much more than the income that they offer to the bank
- Not much scope for cross-selling
Digital exclusion definition
Inability to participate in a computer-based society
Why may someone become digitally excluded?
- Older and grew up without computers
- Low incomes and do not have access
Ways digital inclusion programmes can help to address financial exclusion:
- Housebound people may not be able to get to a branch bank, but a computer enables them to access online
- Disabled people can access information online through software
- People who work unsocial hours can access online 24/7
How does multiculturalism affect providers as employers?
They need to adapt their work practices to accommodate traditions of different cultures
Example of employers adapting work practices to accommodate different cultures:
Muslim staff may need to be free on a Friday to attend prayers and some may require space to pray while at work
Ways older people in the UK can be helped planning pensions and boosting income after retirement:
- Equity release schemes to enable people to unlock cash tied up in a house
- Specialist funds who take savers’ deposits and invest the money in equities and bonds
Governments have suggested people should not rely on state pension for their only income in retirement - what should people do instead?
- Have an occupational pension
- Pay into a private pension scheme
What type of pension have employers been switching to?
Money-purchase schemes
Final-salary pension scheme definition
A pension scheme in which employee is guaranteed a percentage of the last salary that they earned
Money-purchase pension scheme definition
A pension scheme in which the employee pays into a fund and takes a pension from the proceeds when they retire - there is no guarantee for the amount that they will receive
What did the government do once realising that high numbers of people would be reliant on only state pension due to not all employers offering an occupational pension until recently?
They introduced ‘auto-enrollment’ into a mandatory basic workplace pension scheme that all employers would be required to offer
What is the National Employment Savings Trust?
A pension scheme that any employer of any size can use to meet its requirements to offer a workplace pension scheme
How does enrollment into the NEST work?
Employees are automatically enrolled and are able to opt out only once they have been enrolled
A term in most mortgage loans is that the borrower pays off the loan before what?
Retirement
There is a wide geographical imbalance in house prices - what does this mean?
Property prices in some areas are rising much faster than in the rest of the country
