BTEC Level 3 Business - Unit 3 Personal Finance Sector

Vocabulary practice flashcards covering the key concepts, financial institutions, and pension definitions from Unit 3 BTEC Level 3 Personal Finance.

Financial Institutions

Companies and organisations engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.

Bank of England

The central bank of the UK that ensures financial stability, sets interest rates to help control inflation, prints bank notes, and manages gold and foreign currency reserves.

Banks

For-profit financial institutions owned by shareholders that handle financial transactions and store money on behalf of the public, enabling payments, credit, and savings.

Building Societies

Financial institutions offering day-to-day banking, mortgages, and credit that are owned entirely by their members rather than shareholders.

Credit Unions

Member-owned, non-profit financial co-operatives controlled by their members that provide savings, loans, and other financial services at competitive rates.

National Savings and Investments (NS&I)

A government-backed savings organisation offering products such as Premium Bonds where savings are $100\%$ secure and used to fund government spending.

Insurance Companies

For-profit businesses that help individuals and organisations protect themselves against financial loss in exchange for regular fee payments.

Premium

The fee paid to an insurance company in exchange for financial coverage against potential losses or risks.

Pension Companies

Financial businesses that manage pension funds and invest money to grow savings for retirement.

New State Pension

A regular government payment for individuals reaching State Pension age on or after 6 April 2016, with a full value of $£230.25$ per week based on National Insurance contributions.

Protected Payment

Any pension amount earned above the full new State Pension of $£230.25$ from National Insurance contributions or credits prior to 6 April 2016.

Pension Credit

An income-related benefit for low-income retirees that tops up weekly income to $£227.10$ for single people or $£346.60$ for couples.

Workplace Pension

A retirement savings scheme arranged by an employer where a percentage of pay is automatically invested each payday, usually supported by employer contributions and tax relief.

Personal Pensions

Pensions arranged individually (also known as defined contribution or money purchase pensions) where contributions are placed into investments by a provider.

Pawnbrokers

Businesses that offer short-term loans in exchange for valuable personal items provided as collateral.

Payday Loans

Very short-term, high-interest loans intended to provide fast cash until the borrower's next paycheck.