topics 3.8.9.12

Question 1

What is the role of the Competitions markets authority?

Answer 1

to make markets work well for consumers, businesses and the economy

Question 2

what is the role of the financial services compensation scheme?

Answer 2

to compensate customers if their provider defaults

Question 3

How much do the FSCS protect up to?

Answer 3

£85,000

Question 4

what type of payments does the fscs cover?

Answer 4

deposits, mortgages and investments

Question 5

what are two advantages of cash?

Answer 5

instant payment, easy to carry

Question 6

what are two disadvantages of cash?

Answer 6

can’t replace if lost, takes longer to give change which reduces efficiency

Question 7

What is CHAPS?

Answer 7

A way of paying for high value transactions which is deposited the same day

Question 8

What is a Bankers draft?

Answer 8

They are cheques which are prepaid and signed by the bank

Question 9

what are two advantages of mobile/online banking?

Answer 9

24/7 access and it’s more convenient than going to a branch

Question 10

what are two disadvantages of mobile/online banking?

Answer 10

risk of fraud and cash such as notes and coins can’t be deposited online

Question 11

what does the prudential regulation authority do?

Answer 11

sets standards and supervises financial institutions

Question 12

Who does the FCA report to?

Answer 12

HM treasury

Question 13

what is the aim of the FCA?

Answer 13

to make markets work well so consumers get a fair deal

Question 14

What does the FOS do?

Answer 14

Deals with complaints from customers about their providers

Question 15

what is the process of dealing with the FOS?

Answer 15

contact provider directly > contact FOS if providers hasn’t responded in 8 weeks > Take matter to court

Question 16

what are two advantages of CHAPS?

Answer 16

no limit to the amount of money transferred, same day delivery of payment

Question 17

what are two disadvantages of CHAPS?

Answer 17

cutting off times on weekdays can be restrictive, sending money to the wrong account can make it hard to get the money back

Question 18

what are two advantages of electronic payments?

Answer 18

convenient, automates payments can be set up

Question 19

what are two advantages of a cash card?

Answer 19

Good for under 18’s, encourages saving money as it’s more effort to withdraw money

Question 20

what is a disadvantage of using a debit card abroad?

Answer 20

You get charged a fee for using it abroad

Question 21

what are two advantages of a pre paid travel card?

Answer 21

currency can be converted at point of sale so it’s not restricted to one currency, can withdraw as cash at ATM

Question 22

what are two disadvantages of a pre paid travel card?

Answer 22

could be stolen while abroad, have to apply for one which sometimes costs money

Question 23

What is a travellers cheque?

Answer 23

It is a cheque which is a set amount of money such as 50, 100 or 500 that can be used abroad

Question 24

what are 3 responses to the credit crunch in 2008 that were recommended by the independent commission on banking?

Answer 24

improve regulation of providers, make sure banks are able to absorb any losses, reduce the amount of risks banks take

Question 25

who is the uk regulatory system supported by?

Answer 25

The FOS, FSCS and the money advice service

Question 26

what is a budget?

Answer 26

a plan of their expected incomings and outgoings over a set time period

Question 27

what is a cash flow forecast?

Answer 27

plans of their expected incomings and outgoing over several time periods

Question 28

what is earned income?

Answer 28

Income that is earned from working

Question 29

what is unearned income?

Answer 29

income that wasn't earned from working

Question 30

what are 3 examples of unearned income?

Answer 30

benefits, state pension, interest on savings

Question 31

what is mandatory expenditure?

Answer 31

compulsory payments you are obligated to pay

Question 32

what are some examples of mandatory expenditure?

Answer 32

Income tax, council tax and motor insurance payments

Question 33

what is essential expenditure?

Answer 33

Expenditure on items that are needed to live

Question 34

what are some examples of essential expenditure?

Answer 34

Rent, food costs, utilities

Question 35

what is discretionary expenditure?

Answer 35

voluntary spending on items that are wants

Question 36

what are some examples of discretionary expenditure?

Answer 36

clothes, DVD's, holidays

Question 37

what is a budget balance?

Answer 37

a persons net financial situation

Question 38

what is the formula for budget balance?

Answer 38

total income - total expenditure

Question 39

what is a zero balance?

Answer 39

when the budget is balanced with all income assigned to be used on making payments, repaying loans or saving

Question 40

what is a positive balance?

Answer 40

the budget is in surplus and there is money to increase spending

Question 41

what is a negative balance?

Answer 41

means that the budget is in deficit so they will have to decrease spending or increase income if possible

Question 42

what is the national minimum wage bracket for 23 and over?

Answer 42

£8.91

Question 43

what is the national minimum wage for 21 to 22 year olds?

Answer 43

£8.36

Question 44

what is the national minimum wage for 18 to 20 year olds?

Answer 44

£6.56

Question 45

What is the national minimum wage for under 18's?

Answer 45

£4.62

Question 46

what is the national minimum wage for apprentices under 19?

Answer 46

£4.30

Question 47

what is the maximum number of hours an employee can work?

Answer 47

a maxiumum of 48 hours per week averaged over 17 weeks

Question 48

How much holiday is an employee entitled to if they work 5 days a week?

Answer 48

5.6 weeks per year

Question 49

How many hours of rest is an employee entitled to in any 24 hour period?

Answer 49

11 hours

Question 50

how many days off is an employee entitles too each week?

Answer 50

1 day off each week

Question 51

what is the percentage of tax for the basic rate?

Answer 51

20%

Question 52

how much money do you earn if you pay basic rate tax?

Answer 52

£12,571 to £50,270

Question 53

What percentage of tax to higher rate earners pay?

Answer 53

40%

Question 54

How much money do you have to be earning to pay higher rate tax?

Answer 54

£50,270 to £150,000

Question 55

How much tax do additional rate earners pay?

Answer 55

45%

Question 56

How much do you have to earn to pay additional rate tax?

Answer 56

over £150,000

Question 57

how much is the personal savings allowance for basic rate tax band?

Answer 57

£1000 tax free savings

Question 58

how much personal savings allowance do higher rate savers get?

Answer 58

£500 tax free savings

Question 59

how much personal savings allowance does an additional rate saver get?

Answer 59

none

Question 60

What qualifies someone to pay national insurance?

Answer 60

if they are aged 16-66 and earn more than £184 - £967 a week

Question 61

what rate do self employed people pay per week?

Answer 61

£3.05

Question 62

What are the PAYE documents

Answer 62

a payslip, a P60 and a P45

Question 63

what is a P45?

Answer 63

a document which is prepared when an employee leaves an employer

Question 64

what is a P60?

Answer 64

a document which is prepared at the end of every tax year

Question 65

What do payslips show?

Answer 65

Earnings before and after deductions and tax code

Question 66

what does a P45 show?

Answer 66

tax code,PAYE reference number,leaving date, NI number

Question 67

what might you need a P60 for?

Answer 67

applying for loans, applying for mortgages and complete a self assessment tax return