topics 3.8.9.12 Flashcards
What is the role of the Competitions markets authority?
to make markets work well for consumers, businesses and the economy
what is the role of the financial services compensation scheme?
to compensate customers if their provider defaults
How much do the FSCS protect up to?
£85,000
what type of payments does the fscs cover?
deposits, mortgages and investments
what are two advantages of cash?
instant payment, easy to carry
what are two disadvantages of cash?
can’t replace if lost, takes longer to give change which reduces efficiency
What is CHAPS?
A way of paying for high value transactions which is deposited the same day
What is a Bankers draft?
They are cheques which are prepaid and signed by the bank
what are two advantages of mobile/online banking?
24/7 access and it’s more convenient than going to a branch
what are two disadvantages of mobile/online banking?
risk of fraud and cash such as notes and coins can’t be deposited online
what does the prudential regulation authority do?
sets standards and supervises financial institutions
Who does the FCA report to?
HM treasury
what is the aim of the FCA?
to make markets work well so consumers get a fair deal
What does the FOS do?
Deals with complaints from customers about their providers
what is the process of dealing with the FOS?
contact provider directly > contact FOS if providers hasn’t responded in 8 weeks > Take matter to court
what are two advantages of CHAPS?
no limit to the amount of money transferred, same day delivery of payment
what are two disadvantages of CHAPS?
cutting off times on weekdays can be restrictive, sending money to the wrong account can make it hard to get the money back
what are two advantages of electronic payments?
convenient, automates payments can be set up
what are two advantages of a cash card?
Good for under 18’s, encourages saving money as it’s more effort to withdraw money
what is a disadvantage of using a debit card abroad?
You get charged a fee for using it abroad
what are two advantages of a pre paid travel card?
currency can be converted at point of sale so it’s not restricted to one currency, can withdraw as cash at ATM
what are two disadvantages of a pre paid travel card?
could be stolen while abroad, have to apply for one which sometimes costs money
What is a travellers cheque?
It is a cheque which is a set amount of money such as 50, 100 or 500 that can be used abroad
what are 3 responses to the credit crunch in 2008 that were recommended by the independent commission on banking?
improve regulation of providers, make sure banks are able to absorb any losses, reduce the amount of risks banks take
who is the uk regulatory system supported by?
The FOS, FSCS and the money advice service
what is a budget?
a plan of their expected incomings and outgoings over a set time period
what is a cash flow forecast?
plans of their expected incomings and outgoing over several time periods
what is earned income?
Income that is earned from working
what is unearned income?
income that wasn’t earned from working
what are 3 examples of unearned income?
benefits, state pension, interest on savings
what is mandatory expenditure?
compulsory payments you are obligated to pay
what are some examples of mandatory expenditure?
Income tax, council tax and motor insurance payments
what is essential expenditure?
Expenditure on items that are needed to live
what are some examples of essential expenditure?
Rent, food costs, utilities
what is discretionary expenditure?
voluntary spending on items that are wants
what are some examples of discretionary expenditure?
clothes, DVD’s, holidays
what is a budget balance?
a persons net financial situation
what is the formula for budget balance?
total income - total expenditure
what is a zero balance?
when the budget is balanced with all income assigned to be used on making payments, repaying loans or saving
what is a positive balance?
the budget is in surplus and there is money to increase spending
what is a negative balance?
means that the budget is in deficit so they will have to decrease spending or increase income if possible
what is the national minimum wage bracket for 23 and over?
£8.91
what is the national minimum wage for 21 to 22 year olds?
£8.36
what is the national minimum wage for 18 to 20 year olds?
£6.56
What is the national minimum wage for under 18’s?
£4.62
what is the national minimum wage for apprentices under 19?
£4.30
what is the maximum number of hours an employee can work?
a maxiumum of 48 hours per week averaged over 17 weeks
How much holiday is an employee entitled to if they work 5 days a week?
5.6 weeks per year
How many hours of rest is an employee entitled to in any 24 hour period?
11 hours
how many days off is an employee entitles too each week?
1 day off each week
what is the percentage of tax for the basic rate?
20%
how much money do you earn if you pay basic rate tax?
£12,571 to £50,270
What percentage of tax to higher rate earners pay?
40%
How much money do you have to be earning to pay higher rate tax?
£50,270 to £150,000
How much tax do additional rate earners pay?
45%
How much do you have to earn to pay additional rate tax?
over £150,000
how much is the personal savings allowance for basic rate tax band?
£1000 tax free savings
how much personal savings allowance do higher rate savers get?
£500 tax free savings
how much personal savings allowance does an additional rate saver get?
none
What qualifies someone to pay national insurance?
if they are aged 16-66 and earn more than £184 - £967 a week
what rate do self employed people pay per week?
£3.05
What are the PAYE documents
a payslip, a P60 and a P45
what is a P45?
a document which is prepared when an employee leaves an employer
what is a P60?
a document which is prepared at the end of every tax year
What do payslips show?
Earnings before and after deductions and tax code
what does a P45 show?
tax code,PAYE reference number,leaving date, NI number
what might you need a P60 for?
applying for loans, applying for mortgages and complete a self assessment tax return
