TOPIC 1 PERSONAL FINANCIAL SUSTAINABILITY

Question 1

How much debt was there in the uk in 2008

Answer 1

1400bn

Question 2

IS debt on the rise or going down

Answer 2

Going up

Question 3

How many unemployed people in jan 2009

Answer 3

1.62m

Question 4

Is unemployment rising or decreasing

Answer 4

Was rising in the mid 10’s but is now declining

Question 5

How many properties were repossessed in 2009

Answer 5

49,000

Question 6

Has the use of pay day loans been increasing or decreasing

Answer 6

Increasing

Question 7

What should individuals aim to know about their finances

Answer 7

◆ pay into a pension scheme to ensure that they will have an adequate income in
retirement;

◆ look for ways to increase their incomes – whether through promotion and career
development, or by working overtime, taking on a second job, etc;

◆ make use of appropriate insurance products to protect their incomes;

◆ regularly monitor, review and amend their financial plans; and

◆ have clear, realistic contingency plans to deal with the unexpected events that
can disrupt their carefully made plans completely.

Question 8

How often can you pay council tax

Answer 8

Annually, quarterly, monthly

Question 9

What is the key principle of flexible financial planning

Answer 9

Expect the unexpected

Question 10

What are features of a “Dynamic” plan

Answer 10

Balanced between time periods

Informed - (How much repayments, any fees?)

Able to adapt to changing products and services - (If a better product arrives be able to swap to it)

Fluid - (At certain times of the month be able to have higher income due to working more over summer Eg)

Realistic - (Not put in numbers miles over what you are earning now, SHouldn’t be on a best case scenario but between pessimistic and optimistic)

Question 11

What’s the first step in making a financial plan

Answer 11

List out all the needs, wants and aspirations and how much they’ll cost

Question 12

Examples of mandatory expenditure

Answer 12

Income tax and NIC’s

Tv licence

Car insurance

Question 13

Examples of essential expenditure

Answer 13

Basic food and drink

Electricity, water , gas bills

Travel to work/college

Question 14

Examples of discretionary expenditure

Answer 14

snack food and drinks

holidays

Entertainment

Question 15

What are your spending priorities

Answer 15

1.Pay all mandatory bills.
2. Meet basic needs.
3. Pay essential bills.
4. Divide any surplus between spending and saving.

Question 16

What was the old view on borrowing and saving

Answer 16

saving was only for high value luxury items

Borrowing was a last resort and was looked down on

Question 17

What is a what if equation

Answer 17

Throwing situations up like:
What if I get made redundant
What if i suffer an illness
What if i start a family 5 years later

Question 18

What payday loan restriction did the fca bring in 2015

Answer 18

Max you can pay back is double the loan

Question 19

did the payday loan restriction change anything in 2016

Answer 19

People still had the same debt as the year before

Question 20

What is a logbook loan

Answer 20

A loan that allows you to use your vehicle as collateral. Can be expensive and risky as if you don’t pay back the company can sell the car to repay the loan

Question 21

What is a NEST pension

Answer 21

The NEST is a low-cost, trust-based pension scheme. Employers since 2012 had had to automatically sign employees up to it.