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topic seven - Coggle Diagram
topic seven
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. The borrower does not become the legal owner of the item until all the repayments have been made.
Inflation
A general rise in prices, which means that the purchasing power of money falls.
Interest Rate
The amount, expressed as percentage, that a financial services provider charges a borrower when it lends money, or pays to a saver.
Life Assurance
A type of insurance policy that pays out a sum of money if the insured person dies. It is also sometimes called 'life insurance'.
Limited Company
A company in which the owners' financial liability is restricted to their investment. Legally, a limited company is regarded as being separate from the people who own it, so they are not liable to repay all the business debts from their personal assets.
Limited Liability
When a person is liable for a company's debts only up to the value of their investment.
Loan Forbearance
When a lender does not seek to repossess a property as soon as the borrower misses a few monthly payments, instead allowing the customer to stop or make reduced payments for a set period.
Money Advice Service
A consumer information service set up by the government to help people make informed financial decisions.
Partnership
A business in which all the business partners share responsibility and profits. Legally, the partners are not regarded as being separate from the business, so they are liable for any debts incurred.
Payday Loan
A loan, designed to be taken out for only a very short period, which charges a very high APR.
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 Independence Payment (PIP)
A benefit payable to people who need financial support because of disability or a long-term health problem. It has replaced Disability Living Allowance.
Personal Pension Plan
Long-term money-purchase products provided by banks, insurance companies and other providers to help customers to build up a pot of money they can use to buy an income when they retire. There is tax relief on the payments made into the plan.
Redundancy
Losing a job because the business no longer needs, wants or can afford that job to be done; it is related to the needs of the business and not to how well or badly an individual does their job.
Savings Bonds
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.
Secured Loan
A loan secured against an asset, which can be seized and sold should the borrower not meet their repayments.
Social Security
Government provisions for people in need of financial assistance, ie benefits.
Sole Trader
A business owned and run by a single person. Legally, there is no distinction made between the business and the person who owns it, unlike with a limited company, where the business is a separate legal entity. A sole trader has unlimited liability for the debts of the business.
Universal Credit
A new UK welfare benefit intended to replace the following six separate benefits: income-based Job seeker's Allowance; income based Employment and Support Allowance; Income Support; Working Tax Credit; Child Tax Credit; and Housing Benefit. It is intended to be rolled out in stages.
Unsecured Lending
Borrowing that is not secured against an asset, eg personal loans, credit cards and overdrafts.
Variable-Rate Mortgage
A mortgage loan whereby the borrower pays whatever the provider's basic mortgage rate is at the time. This is usually known as the standard variable rate (SVR).