The Personal Life Style Flashcards
When does the life cycle begin and end?
Birth -> Death
Name the financial service providers that offer products designed to enable people to pay for life events
Banks Building societies Credit unions Friendly societies Insurance companies
Why do people spend money?
To pay for needs
To pay for wants
To pay for aspirations
How can people with long term health problem / disability save money and get income?
Free/ low cost health care with NHS in U.K.
Benefits from government
Define risk averse
Someone who avoids taking risks in all aspects of their life
Define risk tolerant
Someone who is willing to take risks
Name the types of risks
Physical risks
Emotional risks
Risk to reputation
Financial risks
Give examples of physical risks
Hazardous risks e.g. Sports
Subtle risks e.g. Alcohol, sunbathing, smoking
What stage of the life cycle are people more likely to take physical risks?
Likely - younger
Unlikely - older / parents
Give examples of emotional risks
Trusting other people therefore risking being hurt by that person
How do people try to reduce the financial impacts of physical risks?
Take out insurance against injury / death
How to people try to reduce the financial impacts of emotional risks?
Pre-nuptial arrangement that keeps finances separate when married
Give examples of financial risks to reputation
Borrowing money and not repaying it on time
-> impacts on how much they can borrow in the future and at what cost
Give examples of financial risks
Putting money in an investment that might fall in value
Gambling
Give the key example of an external influence that affects personal financial planning
Interest rate - set by the Bank of England
-> affects interest on savings / amount charged for loans
Give examples of external social influences that affect personal financial planning
Demographic changes - population size
Attitudes / habits - e.g. Attitudes to work, marriage, debt
Give examples of external economic influences that affect personal financial planning
Economic boom - when a country produces / sells larger amount of goods and services
-> more jobs, higher income
Recession - opposite
-> strain on benefits system
Which factors affect the age at which people retire and how long their retirement lasts?
Life expectancy
Age structure of the country
What factors are causing the typical life cycle to increase?
Better living conditions Better nutrition Medical advances Lifestyle choices - eating, exercise, alcohol, smoking Genes
At what age do men and women currently qualify for a state pension?
Men - 65
Women - 60s
How does the government fund state pensions?
Taxes / National insurance contributions from currently working people
What age will people qualify for a state pension by 2020 and 2028?
2020 - 66
2028 - 67
Where might people receive an additional pension from?
Occupational pension provided by their employer
Why is it common for pensioners to move abroad?
Warmer climate
Reduced living expenses
Define career mobility
The ability to move between jobs / move form one job type to another
Why are people more flexible in their career mobility nowadays?
Better education / training
Why have tuition fees for higher education increased in recent years?
Greater demand for higher education
Economic recession
Where can people access learning opportunities?
School / university
On the job training
Apprenticeships
Self study
Why is it now common for family members to live separately?
More likely to move away from home to work
More children can afford to live independently
More marriages end in divorce
More people migrate abroad -> find work / retire
