Personal Finance - Types of Financial Institution

Question 1

Bank of England

Answer 1

The UK’s central bank with responsibility for maintaining a healthy level of financial stability for the UK as a whole.

Question 2

Banks

Answer 2

An organization that handles financial transactions and stores money on behalf of its customers.

Question 3

Building societies

Answer 3

Organisations that handle financial transactions and store money on behalf of their members. Members
(account holders) are part-owners of the building society and have a right to vote and receive
information on the running of the society.

Question 4

Credit unions

Answer 4

Not-for-profit organizations that handle financial transactions and store money on behalf of their members.

Question 5

National Savings

and Investment

Answer 5

A government-backed organization that offers a secure savings option

Question 6

Insurance companies

Answer 6

Businesses that protect against the risk of loss in return for a premium. They are profit making
organizations.

Question 7

Pension companies

Answer 7

Businesses that sell policies to individuals, whether privately or through employers, to allow them to
save now to fund retirement in the future.

Question 8

Pawnbrokers

Answer 8

Businesses or individuals who loan money against the security of a personal asset e.g. an item of jewelry.

Question 9

Payday Loans

Answer 9

Organizations that offer a short-term source of finance to bridge a gap between now and next
receiving a wage.