5.4 The social environment

Question 1

Full social inclusion definition

Answer 1

A situation in which all members of society can participate fully in decisions that affect them

Question 2

Reasons people can be excluded:

Answer 2

• Disability
• Language difficulties
• Poor basic skills
• Live in a deprived area

Question 3

Financial exclusion definition

Answer 3

The inability to access even the most basic financial services

Question 4

What is the first sign that someone is financially excluded?

Answer 4

They do not have a bank current account

Question 5

Government initiatives aimed at promoting social inclusion:

Answer 5

• Money Advice Service

- Basic bank accounts (all banks obliged to offer)

Question 6

What does the basic bank account provide?

Answer 6

Simple banking facilities without allowing the customer to get into debt

Question 7

Ways in which financial services providers can support financial inclusion:

Answer 7

• Provide products aimed at financially excluded
• Provide information in a way that is accessible to everyone
• Promoting financial inclusion through education

Question 8

What does the way in which a provider supports financial inclusion depend on?

Answer 8

• How the issue fits in with the provider’s values and branding
• How it impacts profitability

Question 9

Why is offering services to financially excluded customer not economically viable for the provider?

Answer 9

• Their few small transactions cost much more than the income that they offer to the bank
• Not much scope for cross-selling

Question 10

Digital exclusion definition

Answer 10

Inability to participate in a computer-based society

Question 11

Why may someone become digitally excluded?

Answer 11

• Older and grew up without computers

- Low incomes and do not have access

Question 12

Ways digital inclusion programmes can help to address financial exclusion:

Answer 12

• 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

Question 13

How does multiculturalism affect providers as employers?

Answer 13

They need to adapt their work practices to accommodate traditions of different cultures

Question 14

Example of employers adapting work practices to accommodate different cultures:

Answer 14

Muslim staff may need to be free on a Friday to attend prayers and some may require space to pray while at work

Question 15

Ways older people in the UK can be helped planning pensions and boosting income after retirement:

Answer 15

• 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

Question 16

Governments have suggested people should not rely on state pension for their only income in retirement - what should people do instead?

Answer 16

• Have an occupational pension

- Pay into a private pension scheme

Question 17

What type of pension have employers been switching to?

Answer 17

Money-purchase schemes

Question 18

Final-salary pension scheme definition

Answer 18

A pension scheme in which employee is guaranteed a percentage of the last salary that they earned

Question 19

Money-purchase pension scheme definition

Answer 19

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

Question 20

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?

Answer 20

They introduced ‘auto-enrollment’ into a mandatory basic workplace pension scheme that all employers would be required to offer

Question 21

What is the National Employment Savings Trust?

Answer 21

A pension scheme that any employer of any size can use to meet its requirements to offer a workplace pension scheme

Question 22

How does enrollment into the NEST work?

Answer 22

Employees are automatically enrolled and are able to opt out only once they have been enrolled

Question 23

A term in most mortgage loans is that the borrower pays off the loan before what?

Answer 23

Retirement

Question 24

There is a wide geographical imbalance in house prices - what does this mean?

Answer 24

Property prices in some areas are rising much faster than in the rest of the country