External Influences On The Life Cycle Flashcards
external influences
the length of various stages in the life cycle, and what happens during them, is affected by external influences including socio-economic trends
where do external influences originate from?
originate from outside a person and come from the external environment in which everyone lives.
do people control external influences?
no as they’re beyond their control and they affect many people
example of key external influence for personal financial planning
the interest rate set by the Bank of England
how does this rate affect the interest rate?
affects the interest rate that financial services providers pay on savings and the amount they charge for loans
what happens if bank rate is low and what’s its impact?
savers will receive very low returns and borrowing becomes cheaper. this has an impact on people’s ability to save for life events and whether or not they can afford to borrow money
social trends definition
- include demographic changes
examples of social trends
- changes to population size and structure through births, deaths and migration.
- changing attitudes and habits, such as attitudes to work, marriage and debt
economic trends (economic boom) definition
include periods when a country is producing and selling increasing amounts of goods and services
what does an economic boom lead to?
a greater number of jobs being available and so lower unemployment and a higher income per person in the country
define recession
when a country’s production falls for two or more consecutive quarters (6 months)
what does recession lead to?
- fewer jobs are available, unemployment rises and people have a lower income per person.
- employees lose their jobs and young adults find it difficult to find a first job
