The Personal Life Style

Question 1

When does the life cycle begin and end?

Answer 1

Birth -> Death

Question 2

Name the financial service providers that offer products designed to enable people to pay for life events

Answer 2

Banks
Building societies
Credit unions
Friendly societies
Insurance companies

Question 3

Why do people spend money?

Answer 3

To pay for needs
To pay for wants
To pay for aspirations

Question 4

How can people with long term health problem / disability save money and get income?

Answer 4

Free/ low cost health care with NHS in U.K.

Benefits from government

Question 5

Define risk averse

Answer 5

Someone who avoids taking risks in all aspects of their life

Question 6

Define risk tolerant

Answer 6

Someone who is willing to take risks

Question 7

Name the types of risks

Answer 7

Physical risks
Emotional risks
Risk to reputation
Financial risks

Question 8

Give examples of physical risks

Answer 8

Hazardous risks e.g. Sports

Subtle risks e.g. Alcohol, sunbathing, smoking

Question 9

What stage of the life cycle are people more likely to take physical risks?

Answer 9

Likely - younger

Unlikely - older / parents

Question 10

Give examples of emotional risks

Answer 10

Trusting other people therefore risking being hurt by that person

Question 11

How do people try to reduce the financial impacts of physical risks?

Answer 11

Take out insurance against injury / death

Question 12

How to people try to reduce the financial impacts of emotional risks?

Answer 12

Pre-nuptial arrangement that keeps finances separate when married

Question 13

Give examples of financial risks to reputation

Answer 13

Borrowing money and not repaying it on time

-> impacts on how much they can borrow in the future and at what cost

Question 14

Give examples of financial risks

Answer 14

Putting money in an investment that might fall in value

Gambling

Question 15

Give the key example of an external influence that affects personal financial planning

Answer 15

Interest rate - set by the Bank of England

-> affects interest on savings / amount charged for loans

Question 16

Give examples of external social influences that affect personal financial planning

Answer 16

Demographic changes - population size

Attitudes / habits - e.g. Attitudes to work, marriage, debt

Question 17

Give examples of external economic influences that affect personal financial planning

Answer 17

Economic boom - when a country produces / sells larger amount of goods and services
-> more jobs, higher income

Recession - opposite
-> strain on benefits system

Question 18

Which factors affect the age at which people retire and how long their retirement lasts?

Answer 18

Life expectancy

Age structure of the country

Question 19

What factors are causing the typical life cycle to increase?

Answer 19

Better living conditions
Better nutrition
Medical advances
Lifestyle choices - eating, exercise, alcohol, smoking
Genes

Question 20

At what age do men and women currently qualify for a state pension?

Answer 20

Men - 65

Women - 60s

Question 21

How does the government fund state pensions?

Answer 21

Taxes / National insurance contributions from currently working people

Question 22

What age will people qualify for a state pension by 2020 and 2028?

Answer 22

2020 - 66

2028 - 67

Question 23

Where might people receive an additional pension from?

Answer 23

Occupational pension provided by their employer

Question 24

Why is it common for pensioners to move abroad?

Answer 24

Warmer climate

Reduced living expenses

Question 25

Define career mobility

Answer 25

The ability to move between jobs / move form one job type to another

Question 26

Why are people more flexible in their career mobility nowadays?

Answer 26

Better education / training

Question 27

Why have tuition fees for higher education increased in recent years?

Answer 27

Greater demand for higher education

Economic recession

Question 28

Where can people access learning opportunities?

Answer 28

School / university
On the job training
Apprenticeships
Self study

Question 29

Why is it now common for family members to live separately?

Answer 29

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