Topic 9

Question 1

Aspirations

Answer 1

Things that a person wants/would like to have in the future, such as buying a car or owning a home

Question 2

ATM

Answer 2

Automated Teller Machine, also known as a cash point

Question 3

Balance

Answer 3

Income minus expenses

Question 4

Budget

Answer 4

A plan of expected incomings and outgoings over a set time period such as a month. The Budget is also a term given to the government’s spending plan, which the chancellor sets out in the house of commons.

Question 5

Budget balance

Answer 5

Total income minus total expenditure, a person’s net financial situation

Question 6

Budget surplus

Answer 6

A sum of money available once all the essential expenditure in a month has been made

Question 7

Cash flow forecast

Answer 7

A plan of expected incomings and outgoings over several time periods, such as the next three months.

Question 8

Chancellor of the Exchequer

Answer 8

The British cabinet member responsible for financial and economic matters and in charge of the treasury.

Question 9

Consumer Prices Index

Answer 9

One of the ways the government measures inflation, it checks a representative sample of goods on a monthly basis to see how the prices are rising or falling.

Question 10

Credit history

Answer 10

A record of money borrowed and repaid by an individual, held by credit reference agencies and are checked by providers before a customer is given a borrowing product

Question 11

Current account

Answer 11

Bank or building society accounts where money is stored in the form of electronic balances and people can add money or withdraw it to make payments

Question 12

Discretionary Expenditure

Answer 12

Voluntary spending on products and services that people want now, and savings towards the products they aspire in the future.

Question 13

Dividend

Answer 13

A payment of profits from a company to its shareholders, often at a twice yearly interval, as cash or as further shares.

Question 14

Duty

Answer 14

The tax paid on certain items, including fuel, cigarettes and alcohol

Question 15

Essential expenditure

Answer 15

Spending on items required to live, such as rent or mortgage repayments, food and drink and gas or electricity bills.

Question 16

Income

Answer 16

Earnings, savings and interest payments received within a certain timeframe

Question 17

Income Tax

Answer 17

Tax paid on earnings from employment, self employment or interest from savings.

Question 18

Inflation

Answer 18

A rise in prices, which means that the spending power of money falls.

Question 19

Insurance

Answer 19

Products that give financial protection against certain events. For example, someone who has travel insurance might be able to claim the holiday cost back if they have an illness.

Question 20

Investments

Answer 20

Money paid into financial products, the aim is that the value of the product will grow over time so they will receive back more money than was invested originally - way of saving over the medium or long term.

Question 21

Mandatory Expenditure

Answer 21

Compulsory outgoings, they do not necessarily apply to everyone but if they do apply, they must be paid

Question 22

Mortgage

Answer 22

A loan taken out to pay for a property, usually over a long term, e.g. 25 years

Question 23

National Insurance Contributions

Answer 23

Money deducted from the pay of people who are employed or self employed and used by the government to fund state pensions and other benefits

Question 24

Needs

Answer 24

Things that a person needs to survive, such as food, basic clothes and a place to live.

Question 25

Office for National Statistics

Answer 25

The independent organisation that produces statistics on many aspects of UK life, such as housing, employment, health etc.

Question 26

Pension

Answer 26

An income that people receive after retirung from work. In the UK people receive a state pension but some also receive pension payments from schemes run by their former employers

Question 27

Premium Bond

Answer 27

A lottery bond, issued by NS&I, that automatically enters into a prize draw with tax free prizes or premiums. Bonds must be held for a full calendar month after they were purchased, and retain an equal chance of winning until cashed in.

Question 28

Real terms

Answer 28

A value adjusted to account for changes in prices. For example, although someone may receive a 5% pay increase, adjusted for inflation the pay increase is approximately 2%

Question 29

Retail Prices Index RPI

Answer 29

One of the ways the government measures inflation. It is calculated by checking the prices of a representative sample of goods, but it also takes into account mortgage interest payments and other home costs

Question 30

Self-employment

Answer 30

Earning an income by selling your goods or services directly to a customer, rather than being employed by somebody else and being paid a salary.

Question 31

Transaction

Answer 31

Buying or selling something

Question 32

Utility

Answer 32

An essential public service, such as electricity, gas water and sewerage.

Question 33

Wants

Answer 33

Things that people would like but can survive without, such as entertainment, fashionable clothes, etc.