LIBF Unit 3 topics 1, 2, 3, 4, 5, 6, & 7. Exam Resource. 100% Approved. Rated A+

LIBF Unit 3 topics 1, 2, 3, 4, 5, 6, & 7. Exam Resource. 100% Approved. Rated A+ Assets - -Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares. Bank rate - -The interest rate that the Bank of England uses when it lends money to other banks. Financial services providers take account of the Bank rate when they decide how to set interest rates on their own products. Bankruptcy - -A situation in which a person cannot pay their debts and is the subject of a court order that shares out their assets between their creditors. Budget - -A plan of expected incomings and outgoings over a set time period such as a month. The Budget is also the term given to the government's annual spending plan, which the Chancellor sets out in the House of Commons each year. Cash-flow forecast - -A plan of expected incomings and outgoings over several time periods, such as the next three months or a year. Cash-flow modelling - -A software program that can predict the medium- and long-term impact of different decisions and events on an individual's income, expenditure and savings plans. Contingency plan - -A plan to deal with unexpected changes in income or expenditure. Credit card - -A card that allows the holder to make purchases face to face, online or over the phone, and to withdraw cash from an ATM. Unlike a debit card, where the money is taken from the holder's own account, transactions are paid by the card provider. The card holder repays the amount owed to the provider either in one payment or in instalments. The provider charges interest on cash withdrawals from the time the withdrawal is made and on purchases after a certain period. Credit union - -A mutual organisation (that is, owned by its members) that provides a range of financial products to members, eg savings accounts and personal loans. Deficit - -Where expenditure exceeds income. Discretionary expenditure - -Spending on products and services that people want now, and savings towards items they aspire to buy in the future; it is spending or saving that people can choose to do or not. Disposable income - -The amount of money left over once mandatory and essential expenditure has been paid out. Essential expenditure - -Spending on items required to live, eg rent or mortgage repayments, food and drink, water supplier, gas and electricity. Financial capability - -Being able to manage personal finances effectively. Fixed interest - -Paying the same rate of interest until the end of the savings, investment or loan term. Flexible financial planning - -Making financial plans to cover wants, needs and aspirations over the medium to long term, which make allowance for unexpected expenses and changes in circumstance (eg by including saving and insurance). Hire purchase - -A type of secured consumer credit, to finance items such as cars and furniture, which involves the borrower repaying over a number of years. Income protection insurance - -A policy that allows people to manage the risk of loss of earnings over a long term. It pays out a monthly income to insured people who have suffered an accidental injury or long-term illness and who are therefore unable to work. Individual savings account (ISA) - -An account that pays interest tax-free on savings up to a certain level. In 2014 the rules were changed, with a higher limit on the amount that can be saved tax free. Savers can choose to save the entire amount in cash, or in stocks and shares, or in a mixture of the two. Inflation - -A general rise in prices, which means that the purchasing power of money falls. Insolvency - -A situation in which a person cannot repay what they owe because their debts are greater than their assets. Insurance - -Products that give financial protection against certain events. For example, someone who has travel insurance might be able to claim back the cost of a holiday if they have to cancel through illness. Investments - -Money paid into financial products; the aim is that the value of the product will grow over time and so the person will eventually receive back more money than they paid in. Investments are a way of saving over the medium or long term. Mandatory expenditure - -Compulsory outgoings; they do not necessarily apply to everyone but if they do apply, they must be paid. Money-purchase pension scheme - -A pension scheme in which the value of the fund available at retirement is based on the contributions made by an employee (and their employer, in workplace schemes), which are invested. Also known as defined-contribution schemes. Mortgage - -A loan taken out to pay for a property, usually over a long term such as 25 years. Mortgage payment protection insurance - -An insurance policy intended to cover mortgage payments in the event of illness or unemployment. National Insurance contributions - -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. Non-financial investments - -Investments in items such as fine wines, art and antiques, rather than financial products. Notice account - -An account for which the holder has to tell the provider in advance if they want to withdraw their money. If they do not give the provider the required amount of notice, they lose interest on their savings. Pension - -An income that people receive after retiring from work. In the UK people receive a pension from the state; some people also receive pension payments from schemes run by their former employers or arrangements that they have made for themselves. Personal debt - -The debt owed by individual consumers (as opposed to the debts of companies or governments). Recession - -A period of at least six months in which the amount of goods and services the country is producing is shrinking. Repossession - -A legal process whereby a financial institution (eg a mortgage lender) takes ownership of an asset, often a house, because loan repayments relating to that asset have not been met. Repossession is the last resort in the process of recovering money owed. Savings bond - -A savings product held for a fixed period, eg two years. The holder can only make a limited number of withdrawals, or none at all, during that period without incurring a penalty. Shares - -Also known as 'equities', investments that represent part-ownership in a company. Surplus - -Income that exceeds mandatory and essential expenditure, which means that an individual can choose how to save or spend it. Sustainable personal finance - -Achieving and maintaining a balance between personal income and expenditure to satisfy needs, wants and aspirations within a budget. Attendance Allowance - -Payable to those aged 65+ who have a long-term illness or disability that means they cannot perform basic daily living activities or have limited mobility. Benefits cap - -A limit to the total amount in some benefits that working-age people can receive, even if their full entitlement would otherwise be higher. Carer's Allowance Paid to anyone over 16 who spends 35 hours per week or more looking after someone who has substantial care needs. - - Child Benefit - -Money paid to parents or other people who are responsible for bringing up a child. Child Tax Credit - -A benefit paid to people who are in low-paid work, to help with the costs of bringing up a child. Consumer Prices Index (CPI) - -One of the means the government uses to measure inflation. It is calculated by checking the price of a representative sample of goods on a monthly basis - this enables statisticians to measure how much prices are rising or falling. Contributory benefits - -Benefits paid to eligible claimants providing they have paid the required number of National Insurance contributions (NICs). Employment and Support Allowance - -Provides an income directly from the state when sickness or disability prevents you from working. Gross domestic product (GDP) - -The value of all the goods and services produced within a country over a year. Housing Benefit - -Paid to those who have low incomes - either because they are in low paid work or they are not employed - to help with their housing costs. Income Support - -A payment designed to provide a 'safety net' for those not eligible for other unemployment and sickness allowances, to provide money to pay for basic needs. Jobseeker's Allowance - -The main benefit for those of working age who are not working full time but are able to work. Life expectancy - -The number of years that people are expected, on average, to live, based on the year in which they are born. Means testing - -Means-tested benefits are reduced if your household income is above a certain level or you have more than £6,000 in savings. Non-contributory benefits - -Benefits paid to eligible claimants who have either not paid enough NICs to claim contributory benefits or need a 'top-up' payment because the contributory benefits they receive do not meet their income needs. Personal Independence Payment - -Payable to those aged 16-64 who have a long-term illness or disability that means they are unable to perform basic daily living activities or have limited mobility. Recession - -A period of at least six months in which the amount of goods and services the country is producing is shrinking. State pension - -A benefit that people receive from the state once they reach a certain age, providing they have paid or been credited with enough National Insurance contributions. Statutory Maternity Pay - -A benefit paid to mothers while they are not working before and after their baby is born. Statutory Paternity Pay - -A benefit payable to fathers to enable them to take time off to support their partner when a baby is born. Statutory Sick Pay - -A benefit that provides an income, via the employer, when sickness or disability prevents an individual from working. Universal Credit - -A means-tested benefit for people of working-age that will eventually replace six other benefits. Welfare state - -The state provision of health care and education, low-cost social housing and a comprehensive system of contributory and non-contributory pensions and social security benefits. Working Tax Credit - -A payment made to people who have a job but earn less than the minimum level considered to be enough to live on.