Savings and investment products

Question 1

Why do 2-5 year olds save or invest

Answer 1

For better toys

Question 2

Why do 5-12 year olds save or invest

Answer 2

To buy games or sweets

Question 3

Why do 13-19 year olds save or invest

Answer 3

To buy a phone or pay for driving lessons

Question 4

Why do 18-25 year olds save or invest

Answer 4

To put a down payment on a house or an expensive holiday

Question 5

What are the 5 reasons for medium and long term savings

Answer 5

• Wants, needs aspirations
• Investment return
• To pay mortgage
• Purchase a car
• Go on holiday

Question 6

Discuss risk, time and inflation in the context of savings and investments

Answer 6

Risk : Savings are low, investments are high
Time : Savings are short or long and investments are usually long
Inflation : Savings are unprotected, investments are protected

Question 7

Who are the 7 providers of savings and investment products

Answer 7

Banks, building societies, credit unions, NS&I, post office, insurance and investment companies

Question 8

What is the purpose of capital growth

Answer 8

To grow the sum of money invested one time

Question 9

What is the purpose of investment for income

Answer 9

Take the return annually, it doesn’t grow

Question 10

What are the internal factors

Answer 10

Values, beliefs, attitudes, perceptions and preferences

Question 11

Describe barclays multi-asset funds and impact investment funds

Answer 11

The assets are shares, property, bonds and commodities, there’s different choices for risk appetite, impact works to positively impact society

Question 12

Describe Lloyd’s sharedealing

Answer 12

Deal online stocks and shares via london stock exchange, unit trusts, OEIC’s and investment trusts

Question 13

Describe Fosters friendly society bonds

Answer 13

Designed for long term growth age 18-80, you can invest better £5000 and £150,000 over a 5 year period, there’s joint accounts for couples and they have grants for education and healthcare

Question 14

What are unit trusts

Answer 14

Established under a trust deed for low confidence investors, managers are responsible for investing funds, the fund cannot borrow money

Question 15

What are investment trusts

Answer 15

Public limited companies that issue shares which are traded on the stock market, the money made is used to invest in other companies, they are able to borrow money

Question 16

What are OEIC’s

Answer 16

Open ended investment companies, pooled collective investment, it’s a hybrid of a unit and investment trust, with a corporate structure they issue shares and expand as people buy shares, managed by an authorised corporate director

Question 17

Describe term assurance

Answer 17

Fixed term, lump sum payout

Question 18

Describe endowment

Answer 18

A life insurance contract that acts as long term savings

Question 19

Describe annuity

Answer 19

Income after retirement, guaranteed income purchased via pension