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A4 personal finance - Coggle Diagram
A4 personal finance
pension
Payday money put into a fund to receive when retired
Pension fund will invest contributions so that you end up with more (Pro)
Auto-enrollment legal requirement
Employer will add to amount (Pro)
most pensions take away from salary (Con)
can be self managed
Retirement can be either income or a lump sum
Have to pay fees (con)
Government bonds and gilts
Issued by the government
buy a bond from government which turns the government into owing you money (debt)
Debt instrument
very low interest rate (con)
guaranteed return (pro)
IOU= buy nw government pays back in future plus interest (Pro)
Fixed rate of interest (pro and con)
Premium bonds
Based on amount deposited, gain entries into prize draws
Max £50,000 for entrys
no guaranteed prize
can withdraw deposit
Risking potential interest (con)
Tax free winning (pro)
Deposit and Savings account
Putting money away (Pro)
Easier to withdraw
generates interest (Pro)
Easy to transfer - linked to a current account (pro)
Lower interest than ISA (con)
Interest subject to income tax dependent on level (con)
Shares
purchased to get some ownership/equity in a business
Receive dividends proportional to ownership %
Dependent on company profits
Useless if company retains profit to re invest
Buying low selling high in order t make money
Risky- chance value of stock plummets
ISA's
Income/interest that is except from tax (limits) (pro)
Will require a minimum deposit (con)
not liquid/ hard to withdraw (Con)
relatively higher interest rate (Pro)