Level 2 Qualification in Personal Finance

BCS/PF Teacher’s Handbook/Optional © The British Computer Society

Level 2 Qualification in Personal

Finance

TEACHERS’ HANDBOOK

OPTIONAL UNITS

UNDERSTANDING MONEY AT WORK (EMPLOYEES)

UNDERSTANDING STATE BENEFITS

MONEY AND CHILDREN

SAVING FOR THE LONG TERM

MONEY AND THE FAMILY

MONEY AND RUNNING A HOME

Version 2.5

BCS/PF Teachers Handbook/Optional/Jul08 © The British Computer Society

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Contents 1. Introduction

2. Unit 1a: Understanding Money at Work (Employees). Assessment criteria Teacher’s guidance Useful resources

3. Unit 1b: Understanding State Benefits. Assessment criteria Teacher’s guidance Useful resources

4. Unit 2a: Money and Children. Assessment criteria Teacher’s guidance Useful resources

5. Unit 2b: Saving for the Long-Term. Assessment criteria Teacher’s guidance Useful resources

6. Unit 3a: Money and the Family. Assessment criteria Teacher’s guidance Useful resources

7. Unit 3b: Money and Running a Home. Assessment criteria Teacher’s guidance Useful resources

8. Resource Directory.

9. Coverage of Adult Financial Capability Framework.

10. Coverage of the Generic Financial Advice Standards.

11. Underpinning Key Skills.

12. Coverage of the European Computer Driving Licence. 13. Coverage of the PSHE Curriculum. 14. Coverage of the Maths Curriculum.


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Introduction

Background to the Personal Finance Qualification

An initial meeting took place in 2005 between the British Computer Society (BCS) and the Basic Skills Agency (BSA) to discuss the potential for a personal finance qualification. The aim was to try and emulate what the European Computer Driving Licence (ECDL) has done for the users of computers for those who require a greater understanding of personal finance. We determined the approach would therefore be to create a qualification made up of a series of units that would each have a focus on a different area of personal finance - mortgages, pensions, money management etc.

The BCS’ role in the project would be to develop and deliver a certification product to market. Throughout the development, the BCS has continued to work closely with partners such as the Financial Services Authority (FSA), BSA, industry subject experts, and regulatory bodies, such as the Financial Services Skills Council and the Qualifications Curriculum Authority (QCA), to ensure that the qualification is sound, has appropriate and relevant content, and has endorsements from relevant stakeholders.

The qualification is aimed at those 16+ who require a level of financial understanding for their personal lives. There is a clear gap in the market for a Level 2 personal finance qualification that focuses on ensuring financial competency. Two main resources will help to underpin the content of the proposed qualifications: the extending level of the Adult Financial Capability Framework1 and the FSA’s baseline survey, Measuring Financial Capability2.

The qualification structure combines four mandatory units that reflect the key domains identified by the financial capability survey2 and six optional units that derive from greater levels of detail relating to the key domains. This lends a degree of flexibility to the qualification as learners can pick and choose the units that are relevant to them. Learners may select the number of units they wish to complete and therefore decide the size of their qualifications. In addition, we will offer individual unit certification for any single unit completed. The qualification structure offers a progressive route via Award, Certificate, and Diploma options. For example: 4 mandatory units + 0 optional units = BCS Level 2 Award in Personal Finance

1 Adult Financial Capability Framework,

2 Measuring Financial Capability, FSA, 2006

Mandatory Unit 1 Managing Money

day to day

Mandatory Unit 2 Taking Control of

your Finances

Mandatory Unit 3 Choosing

Financial Products

Mandatory Unit 4 Getting Financial

Help


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4 mandatory units + 2 optional units = BCS Level 2 Certificate in Personal Finance

4 mandatory units + 4 optional units = BCS Level 2 Diploma in Personal Finance

All unit assessments will be either by a 40 minute multiple choice test containing 24 questions with a 75% pass mark or a 30 minute multiple choice test containing 16 questions with a 75% pass mark. Tests will be delivered via an IT-based solution that will encompass e-assessment methods. Mandatory units: Unit Name Guided Learning Hours 1 Managing Money day-to-day 20 2 Taking Control of your Finances 20 3 Choosing Financial Products 20 4 Getting Financial Help and Advice 10 Optional units: Unit Name Guided Learning Hours 1a Understanding Money at Work 10 1b Understanding State Benefits 10

2a Money and Children 10 2b Saving for the Long Term 10 3a Money and the Family 10 3b Money and Running your Home 10

The units can be approached either one at a time or by interweaving the content e.g. teaching the units ‘Choosing Financial Products’ and ‘Getting Financial Help and Advice’ alongside the ‘Managing Money Day-to-day’ and ‘Taking Control of Your Finances’ units. If this approach is taken then the award could be delivered in 60 guided learning hours.


day to day


your Finances


Financial Products


Help

Optional Unit 2a Money and

Children

Optional Unit 3a Money and the

Family

+

Optional Unit 1b Understanding State Benefits

Optional Unit 3b Money and Running your Home


day to day


your Finances


Financial Products


Help

Optional Unit 2a Money and

Children

Optional Unit 3a Money and the

Family +


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Teacher’s guidance Guidance has been written for each unit to supplement the content outlined in the syllabuses. This guidance complements the syllabuses. Therefore the handbook should be used in conjunction with the syllabuses for each unit. Resources Two key resources are recommended for the delivery of this qualification: the Personal Finance Handbook3 and the FSA’s consumer website4. Additional resources which might be useful have been identified for each unit. Full details for the resources can be found in Section 7.

Assessments taking place in 2007-8 will be based on legislation that will have come into force up to and including 1 October 2007. The Personal Finance Handbook that is currently available is the second edition published in mid-2007 and therefore does not reflect quite all subsequent changes to the regulations affecting personal finance. Web-based resources such as FSA4 and government websites will provide the most up-to-date information. In preparation for assessment the following changes since mid-2007 should be covered where appropriate: Terms and Conditions of Employment Working Time (Amendment) Regulations 2007 (which increase the length of paid holiday to which workers are entitled). Alteration to Financial Services Compensation Scheme for deposits from 1 October 2007 (Financial Services Authority, press release PN/105/2007, 1 October 2007) Links to frameworks and standards Coverage of the Adult Financial Capability Framework, the Generic Financial Advice Standards and the European Driving Licence has been identified along with the underpinning Key Skills required for the optional units. Next steps Following the piloting of the four mandatory units, revisions will be made where appropriate, with the view to having the qualification available from spring 2008. With thanks to: Gill Hind Sarah Jennings Tracy Kurzeja Caryn Loftus Jonquil Lowe Barbara Nance

3 Personal Finance Handbook, CPAG, 2007

4 www.moneymadeclear.fsa.gov.uk

Unit 1a – Understanding Money at Work (Employees)


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Optional Unit 1a: Understanding Money at Work (Employees)

Unit goal: For learners to be able to understand and manage work-related financial matters.

LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will: The learner can: 1a.1 Understand main sources of income

from a job and how they are taxed. [Tax and income]

AC1a.1.a Identify the main sources of income that are available from employment.

AC 1a.1.b For a range of scenarios

carryout: - simple tax calculations - simple National Insurance

calculations - student loan repayments

calculations - a tax rebate claim.

AC 1a.1.c Identify reasons why the

government levies tax.

1a.2 Demonstrate an understanding of the contents of pay related documents.

[Documents]

AC 1a.2.a Identify the main features and purpose of:

- Payslip - P60 - P2 (Notice of coding) - P11D - P45 - P46.

AC 1a.2.b Make rough calculations to

check the accuracy of entries on a pay slip.

1a.3 Understand the main features of the main pension schemes available through workplaces.

[Pensions]

AC 1a.3.a Identify the main features of workplace pension schemes.

AC 1a.3.b Define the key terms used in

workplace pension schemes. AC 1a.3.c Calculate a percentage

pension contribution for a given level of pay.

AC 1a.3.d Identify where to get information about workplace pension schemes.



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LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will: The learner can: 1a.4 Demonstrate an awareness of

employee rights. [Rights]

AC 1a.4.a Identify work situations where the national minimum wage is or is not being paid.

AC 1a.4.b Identify work situations where

the following is justified: - statutory maternity pay - maternity allowance - statutory paternity pay - unpaid maternity leave.

AC 1a.4.c Carry out the correct

procedure to enforce a right to:

- receive national minimum wage

- request flexible working.



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Teachers Guidance

To help with the delivery of the unit the following guidance provides further detail to that provided in the syllabus. The Personal Finance Handbook and the Financial Services Authority Money Made Clear website should provide you with the background knowledge to deliver the unit. Further resources that may be useful are also indicated. Full details for the resources can be found in Section 8. The use of practical activities will make learning more relevant as well as interesting for the learners. For example:

• Use video from The Red Box to stimulate a discussion on why governments levy taxes.

• Use the statistics from The Red Box to look at the breakdown of the government’s income and expenditure.

• Sample payslip in BBC Cashwise magazine can be compared to that of learners own payslips to help check understanding of the different parts.

• In pairs, learners can work through topic on payslips on the Money-go-Round CD-ROM to help understand the different parts of payslips.

• Individuals to find relevant sections on the Direct Gov. website where they can get information on employment rights, tax and national insurance.

• In small groups research either occupational pension schemes or personal pensions/stakeholder schemes and feedback to other groups who have researched the same type of pensions and adjust notes. Then present findings on type of pension allocated.

• Discuss as a whole group the elements of a formal letter. Discuss key words and points needed if writing to request flexible working. Individuals write first draft of letter. Swap with partner and feedback to each other on how letter can be improved. Then write second draft.



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1a.1 Sources of income from Work The learner is required to know about the main sources of income from work and how they are taxed. 1a.1.1 Working as an employee a) Be aware that pay can take different forms: basic pay, overtime, commission, tips, and

fringe benefits. b) Be aware of the choices about working full-time, part-time, permanently, on short-term

contracts and so on and the impact this might have on pay.

Additional guidance Learners need to know about: Forms of pay: basic pay, piece-work rates, overtime, commission, tips, fringe benefits (e.g. pension scheme to which employer contributes, workplace nursery, nursery vouchers, company car, private medical insurance). Working hours: full-time, part-time, job-share, flexi-time, term-time working. Permanent position, temporary work, agency work. Impact: fewer hours generally means less pay overall but also rates of pay in UK tend to be low for part-time work. 1a.1.2 Why taxes are charged a) Consider why governments levy taxes and how the money may be used. b) Understand that eligibility for some state benefits is linked directly to payment of

National Insurance. Additional guidance Learners need to know about: Goods and services society as a whole wishes to enjoy – roads, schools, hospitals, defence, and so on. Taxes pay for social goods and services and for the mechanism of government that organises them. Budget ‘Red Book’ contains interesting information about how government finances are raised and spent. National Insurance contributions can build up entitlement to:

• Jobseeker’s allowance (contribution-based) – not self-employed

• Incapacity benefit

• Bereavement benefits

• State retirement pensions. While not strictly contributory, employees must earn at or above the lower earnings limit to qualify for statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay.



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1a.1.3 How income tax is worked out a) Understand the concept of a tax year. b) Know the basic formula for calculating income tax. c) Understand that income tax data change each tax year. d) Be able to perform simple income tax calculations. e) Know where to find current tax data. f) Have the confidence to check and, if necessary, query a tax deduction. Additional guidance Learners need to know about: Tax year: 6 April to following 5 April.

• Basic formula for working out income tax (2007-8):

• Gross taxable income (ignore tax-free income)

• Less expenses that qualify for full tax relief

• Equals ‘Total income’

• Less personal allowance

• Equals taxable income

• First slice taxed at starting rate (10%)

• Next slice taxed at basic rate (22% on earned income, pensions etc, 20% on savings interest, 10% of dividends)

• Top slice taxed at higher rate (40% except 32.5% on dividends) Current allowances, tax bands and rates from www.hmrc.gov.uk/rates

1a.1.4 How income tax is collected a) How income tax is collected from employees: PAYE, tax codes. b) How underpayments and overpayments of tax are dealt with. c) Be able confidently to complete a tax rebate claim (form R40) for a simple scenario. d) Be confidently able to claim a tax rebate. e) Have the confidence to telephone the HM Revenue & Customs (HMRC) helplines. Additional guidance Learners need to know about: Income tax charged on nearly all types of earnings including most fringe benefits. PAYE (Pay As You Earn) Employer knows how much tax to deduct once HMRC provides tax code for employee. Tax code shows how much tax-free pay you should get – usually amount of your personal allowance. But tax code adjusted to collect tax underpaid or to repay tax overpaid. If no tax code – emergency code that assumes you get just a relevant proportion of the personal allowance for each pay period (e.g. 1/12 of allowance if you are paid monthly). Tax position corrected in first pay period after code issued. Employees with complicated tax affairs may also have to fill in a tax return. Extra tax due is either payable as a lump sum or collected through PAYE by adjusting their tax code.



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If too much tax paid, reclaim. For example, most savings interest paid with tax at 20% already deducted. If you pay tax at less than basic rate, you can reclaim it using form R40. Rebate can either be paid as a cheque, through PAYE or offset against next tax bill.

1a.1.5 How National Insurance for employees is worked out a) Understand the concept of a pay period. b) Know the basic formula for calculating National Insurance. c) Understand that National Insurance data change each tax year. d) Be able to perform simple National Insurance calculations. e) Know where to find current National Insurance data. f) Have the confidence to check and, if necessary, query a National Insurance deduction. Additional guidance Learners need to know about: Class 1 National Insurance charged on most types of earnings but employees do not pay NI on fringe benefits. Pay period: typically weekly or monthly. National Insurance deducted from pay each period if earnings high enough. Basic formula (2007-8):

• Pay up to primary threshold taxed at 0%

• Pay between primary threshold and upper earnings limit taxed at standard rate of11%

• Pay above upper earnings limit taxed at upper rate of 1% Current thresholds, limits and rates from www.hmrc.gov.uk/rates



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1.a.2 Pay-related documents The learner is required to read and understand the contents of pay related documents for employees and understand how the main deductions are worked out. 1a.2.1 Pay slip a) Understand the cumulative system for collecting income tax. b) Understand that the cumulative system does not apply to National Insurance. c) Recognise and understand the main entries on a standard pay slip: gross pay, income

tax, National Insurance, student loan, payroll giving, pension, and net pay. d) Be able to roughly check the accuracy of entries on a pay slip. Additional guidance Learners need to know about: Income tax - cumulative system. Pay for tax year to date less tax-free pay for tax year to date. National Insurance - each pay period in isolation.

• Gross pay - before any deductions

• Income tax - use knowledge learned above to understand entry

• National Insurance - use knowledge learned above

• Student loan - cover purpose of loans, fact that no repayments made until start work and earn above annual threshold (£15,000), then repaid at rate of 9% of excess over £15,000 method of collection from employees through PAYE

• Payroll giving - tax-efficient method of giving to charity. Not all employers run schemes. Where do, you nominate charity, employer arranges payment. Donation deducted from your pay before income tax worked out giving you full income tax relief on amount you give. (No NI relief)

• Pension - occupational scheme - your contributions deducted from your pay before income tax worked out giving you full income tax relief on amount you give. (No NI relief). Pay slip may also record any contribution made by your employer.

• Personal pension - contribution deducted from your pay packet but not before tax worked out because instead contribution is treated as net of tax relief at basic rate and pension provider claims and adds back to your plan the amount of relief. Any higher rate tax relief is given through your PAYE code or claimed through a tax return.

• Net pay. The pay actually paid to your bank account (or handed over in cash) after all the deductions have been made.

1a.2.2 Other pay-related documents a) Be aware of the existence and purpose of other main pay-related documents (P2, P60,

P11D, P45, and P46). Additional guidance Learners need to know about:

• P2 - coding notice. Tells you how much income-tax-free pay you get for the tax year. Shows how this has been worked out.

• P60 - end of year pay summary. Shows the total pay and deductions for the whole tax year.



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• P11D - taxable fringe benefits. Shows taxable value of any fringe benefits you’ve had over the past tax year - e.g. company car, private medical insurance.

• P45 - details of employee leaving work. Shows your pay and deductions from start of tax year up to the date of leaving a job so that new employer can immediately take over deducting correct amount of income tax.

• P46 - employee without a P45. Details for a new employer if you haven’t got a P45

• So that employer can start paying you. You are likely to be put on an emergency tax code until HMRC issues a P2 for you.



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1a.3 Pensions The learner is required to know about the main features of schemes available through workplaces 1a.3.1 Occupational pension scheme a) Understand that this scheme is set up by the employer who contributes to it. b) Understand the difference between defined benefit and defined contribution schemes

and the implication this has for the amount the employer pays towards an employee’s pension.

c) Understand the term ‘contributory’ and that most schemes are contributory. d) Understand the term ‘pensionable pay’ and be aware that all pay might not be

pensionable. e) Understand the mechanism for collecting and paying contributions through the payroll

and relate back to the payslip. f) Know where to get information about any occupational scheme at work. g) Be able to convert a percentage pension contribution into pounds and pence for a

given level of pay. h) Be able to estimate the value to an employee of pension scheme membership

compared with getting extra basic pay. i) Be confident seeking advice on pensions. Additional guidance Learners need to know about: Defined benefit scheme - promises an amount of pension from normal retirement age based on a formula. Typically fraction of your pay for each year you have been in the scheme. Final salary scheme uses pay at or near retirement. Career average scheme uses an average of your pay throughout the whole period of you membership. Defined contribution scheme (also called money purchase). No promise of a set level of pension. What you get depends on amount paid in, how your investment grows, how much is taken away in charges, how much pension you can buy with the fund that has built up by retirement. Usually converted to pension by buying an annuity - special investment where you give up a lump sum (in this case your pension fund) and in return get an income usually for the rest of your life.

1a.3.2 Personal pensions and stakeholder schemes a) Understand that this is a scheme set up by a firm not connected with the employer b) Understand that all these schemes are defined contribution schemes. c) Be aware of the requirements for the employer to offer access to a pension scheme

through the workplace. d) Be aware of when the employer is required to contribute towards the pension and that

in many cases employer contributions are optional. e) Understand the mechanism for collecting and paying contributions through the payroll

and relate back to the payslip. f) Know where to get information about pension schemes available through the

workplace. g) Be confident seeking advice on pensions.



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Additional guidance Learners need to know about: Employer with 5 or more employees must:

• offer membership of occupational scheme OR

• have arrangement for you to pay into group personal pension to which employer pays contribution equal to at least 3% of your pay OR

• have arrangements for you to pay into a stakeholder pension scheme (no requirement for employer to contribute).

For assessment in 2007-8, learners are NOT required to know about government proposals to introduce a new national scheme of pension accounts.



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1a.4 Rights at Work The learner is required to demonstrate an awareness of some key employee rights. 1a.4.1 National minimum wage a) Understand why a government might set a national minimum wage. b) Know where to find out the current rates of national minimum wage. c) Understand which elements of pay are included in or excluded from the national

minimum wage. d) Know the procedure for enforcing a right to receive the national minimum wage. e) Be confident challenging an employer who appears not to be paying the national

minimum wage. f) Be prepared to pursue a complaint over failure to pay the national minimum wage.

Additional guidance Learners need to know about: National Minimum Wage includes, for example: Gross pay (basic pay, incentive payments, bonuses, tips through pay packet) National Minimum Wage does not include, for example: Loans, Pension or lump sum on retirement, Redundancy pay, Premium for overtime or shift work, Special allowance for unsocial hours or being on call, Expenses for travel, special clothing, Fringe benefits (such as luncheon vouchers, company car, employer pension contributions, medical insurance) except accommodation up to a limit.

1a.4.2 Maternity and paternity rights a) Be aware of the right to maternity leave and paternity leave and the maximum length of

leave. b) Be aware of the amount of leave which can be paid leave and the amounts of statutory

maternity and paternity pay. c) Understand that the statutory rates change each year. d) Be aware of maternity allowance and the circumstances in which it may be payable. e) Be able to use the internet to find guidance on flexible working. f) Given a scenario, draft a letter to an employer requesting flexible working. g) Be prepared to request flexible working in appropriate circumstances.



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Useful resources for Unit 1a

(Details of where to order resources can be found in the Resource Directory) Cashwise @ Work BBC magazine covering wide range of issues related to pay, pensions and budgeting Money-go-Round – CD ROM Topic on understanding your payslip MoneyPower CD ROM – Thinking About the Future Personal Finance Handbook Chapter 5 Pensions Chapter 8 Tax and national insurance The Red Box Information, statistics and activities related to tax www.adviceguide.org.uk Citizens Advice guide covering employment and tax www.direct.gov.uk/Employment and www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm Government site giving information on employment rights, tax and national insurance www.moneymadeclear.fsa.gov.uk Products explained - Pensions and Bank accounts www.hmrc.gov.uk HM Revenue and Customs site giving information on tax and national insurance www.moneymatterstome.co.uk Where money comes from Wages from an employer Pensions Where money goes Income Tax National Insurance Pension calculator

Unit 1b – Understanding State Benefits


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Optional Unit 1b: Understanding State Benefits

Unit goal: For learners to be able to understand the main state benefits currently available and the issues related to them. LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

1b.1 Demonstrate an understanding of family- related benefits.

[Family benefits]

AC 1b.1.a Identify the main features of family benefits.

AC 1b.1.b For simple scenarios calculate the

entitlement for: - Child benefit - Child tax credit - Education maintenance allowance.

1b.2 Demonstrate an understanding of the state benefits relating to unemployment, sickness and employment.

[Benefits]

AC 1b.2.a Identify the main features of: - Jobseeker’s allowance - Income support - Statutory sick pay - Incapacity benefit - Disability living allowance - Working tax credit.

AC 1b.2.b Identify circumstances in which housing benefit and council tax benefit may be claimed. AC 1b.2.c Calculate entitlement to statutory

sick pay and tax credits for simple scenarios.

AC 1b.2.d Identify factors that make leaving

benefits to obtain work financially advantageous or disadvantageous

1b.3 Demonstrate an

understanding of non-pension state benefits for older people.

[Non pension benefits]

AC 1b.3.a Identify the main features of and qualification criteria with:

- Pension credit. - Attendance allowance.

AC 1b.3.b For simple scenarios, identify how

entitlement for long term care support is determined and how this differs between England and Scotland.



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LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

1b.4 Demonstrate an awareness of the mechanisms for claiming benefits and measures to tackle benefit fraud.

[Claiming benefits]

AC 1b.4.a Match government agencies with benefits being claimed.

AC 1b.4.b Identify the information required by

government agencies when claiming means tested benefits.

AC 1b.4.c Identify types of benefit fraud.



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Teachers Guidance

To help with the delivery of the unit the following guidance provides further detail to that provided in the syllabus. The Personal Finance Handbook should provide you with the background knowledge to deliver the unit. Further resources that may be useful are also indicated. Full details for the resources can be found in Section 8. The use of practical activities will make learning more relevant as well as interesting for the learners. For example:

• Use appropriate graphic organisers to help record the key points on the different benefits covered in the module. Information on mind maps, concept maps and graphic organisers can be found on the website www.support4learning.org.uk/education .

• Use case studies to decide which benefits may be available.

• Discuss the latest adverts for the government’s campaign to tackle benefit fraud which can be seen on the Targeting Fraud website. Design own adverts.



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1b.1 Family-related benefits The learner is required to have an understanding of family-related benefits. 1b.1.1 Child benefit a) Understand that this is a universal benefit available to virtually all families. b) Understand why governments might wish to support households with children. c) Be able to use internet sources to find the current value of child benefit. d) Be able to work out how much child benefit a family qualifies for given the number of

children.

1b.1.2 Child tax credit a) Understand which households qualify for this benefit b) Know the method of calculating entitlement to child tax credit. c) Be able to calculate entitlement to child tax credit for simple scenarios.

1b.1.3 Education maintenance allowance a) Understand that this is a benefit paid directly to school-age children and the eligibility

criteria. b) Understand why the government introduced this benefit. c) Know how to calculate entitlement to this benefit. d) Be able to calculate entitlement to this benefit.



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1b.2 Benefits The learner is required to understand the state benefits relating to unemployment, sickness and employment. 1b.2.1 Jobseeker’s allowance a) Understand who is eligible for the two types of jobseeker’s allowance (income-based

and contribution-based). b) Understand the distinction between means-tested benefits and contribution-based

benefits. c) Know broadly how entitlement is calculated. d) Use the internet to find information about current rates of jobseeker’s allowance.

1b.2.2 Income support and other means-tested benefits a) Understand who might be eligible for this benefit. b) Know broadly how entitlement is calculated and appreciate the similarity to income-

based jobseeker’s allowance. c) Know that low-income households may be eligible for other benefits, such as housing

benefit and council tax benefit.

1b.2.3 Statutory sick pay and incapacity benefit a) Understand that some state benefits are delivered through employers and that this

applies to statutory sick pay. b) Understand who might be eligible for incapacity benefit. c) Know there are different rates of incapacity benefit and when each applies. d) Use the internet to find information about current rates of statutory sick pay and

incapacity benefit. e) Calculate and compare entitlement to benefits while off work sick with pay while

working. Additional guidance Learners need to know about: Benefits delivered through employers:

• Statutory Sick Pay

• Statutory Maternity Pay

• Statutory Paternity Pay

• Statutory Adoption Pay

1b.2.4 Disability living allowance a) Understand when this benefit may be payable.

1b.2.5 Transition to work a) Understand the concept ‘poverty trap’ and its effect on decisions about whether or not

to work. b) Appreciate how benefits may be designed to overcome the poverty trap.



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1b.2.6 Working tax credit a) Understand which households qualify for this benefit. b) Know the method of calculating entitlement to working tax credit. c) Relate this benefit, in particular the childcare element, back to the concept of the

poverty trap. d) Understand that working tax credit and child tax credit operate as an integrated system. e) Understand the previous year basis of claims, end-year adjustments and disregard for

in-year changes in income. f) Be able to calculate entitlement to tax credits (working and child) for a variety of

scenarios. Additional guidance: Learners need to know about:

• In-year changes in income up to £25,000 are disregarded for finalising the current year’s claim but will normally affect the following year’s claim.

• The main changes in personal circumstances during the year that must be reported immediately to HMRC.

Useful information from: www.taxcredits.inlandrevenue.gov.uk/HomeNew.aspx www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm



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1b.3 Non-pension benefits The learner is required to understand the main non-pension benefits for older people. 1b.4.1 Pension credit a) Understand which households qualify for this benefit and the two elements of it

(guarantee credit and savings credit). b) Understand why this benefit might act as a disincentive for younger people to save for

retirement.

1b.4.2 Attendance allowance and long-term care a) Understand the financial support provided by the state to pay for care either at home or

in a care home. b) Know which of these benefits are means-tested. c) Understand how means-testing for care home fees works, including when a person’s

home will not be counted as part of capital. d) Know how the system is different in Scotland. e) Be able to list and compare the state financial support available to someone needing

care in England and in Scotland. Additional guidance Learners need to know about: Be aware of different capital limits for means-testing for England, Wales, Scotland, and Northern Ireland. Scotland - free personal care up to limit but offset by no attendance allowance (when in a care home).



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1b.4 Claiming benefits The learner is required to understand the mechanisms for claiming benefits and measures to tackle benefit fraud. 1b.4.1 Claiming benefits a) Know which government agencies manage each of the benefits covered by this

module. b) Understand what sort of information an agency would require to assess eligibility for

means-tested benefits. c) For a given a scenario, complete an application form for tax credits. d) Be able confidently to apply for means-tested benefits.

1b.4.2 Benefit fraud a) Know the main types of benefit fraud. b) Understand who the victims of benefit fraud are. c) Understand the ways in which the government tackles benefit fraud. d) Obtain information from the government’s ‘Targeting benefit fraud’ website.



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Useful resources for Unit 1b

(Details of where to order resources can be found in the Resource Directory) Personal Finance Handbook Chapter 9 Benefits and tax credits www.adviceguide.org.uk Citizens Advice guide covers benefits www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm Government site giving information on benefits and benefit fraud www.moneymatterstome.co.uk Where money comes from Benefits www.dwp.gov.uk/campaigns/benefit-thieves Government site explaining how they are tackling benefit fraud

Unit 2a – Money and Children


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Optional Unit 2a: Money and Children

Unit goal: For learners to be able to plan and manage the financial aspects of raising children. LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

2a.1 Be able to plan ahead financially for the birth of a child.

[Planning ahead]

AC 2a.1.a Identify and prioritise the main goals a household is likely to have when a baby is expected.

AC 2a.1.b Identify the statutory paternity/maternity

rights available to parents.

2a.2 Understand how the tax and benefit systems relate to children

[Tax and benefits]

AC 2a.2.a Identify eligibility for child-related benefits in simple scenarios.

AC 2a.2.b Calculate the changes that will occur in a

household budget on the birth of a child taking into consideration possible entitlement to child-related state benefits.

AC 2a.2.c Assess when a child or their parents may be liable for tax.

2a.3 Understand the range of savings and investment products suitable for children.

[Saving]

AC 2a.3.a Assess the goals and circumstances of a child and its family and suggest suitable savings and/or investments.

AC 2a.3.b Interpret an annual statement to monitor

savings over a period of time. AC 2a.3.c Identify ways in which children can be

encouraged to be financially capable.



28

LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

2a.4 Know the financial implications of accessing further or higher education.

[Accessing education]

AC 2a.4.a Calculate entitlement to education maintenance allowance.

AC 2a.4.b For different scenarios: work out using

tables maintenance grant and student loans; calculate expected parental contribution; student loan repayments

AC 2a.4.c Identify sources of financial help, other

than student loans, that may be available to students.

AC 2a.4.d Identify suitable ways to save or invest to

provide financial help for student children.



29

Teachers Guidance

To help with the delivery of the unit the following guidance provides further detail to that provided in the syllabus. The Personal Finance Handbook should provide you with the background knowledge to deliver the unit. Further resources that may be useful are also indicated. Full details for the resources can be found in Section 8. The use of practical activities will make learning more relevant as well as interesting for the learners. For example:

• Use the topic ‘Calculate the Cost of Childcare’ from the Money-go-Round CD-ROM to introduce the unit. Pairs can work through the topic on laptops/PCs or the whole group could look at the topic together using a data projector.

• Use the ideas in the section on Young People in chapter 10 of the Personal Finance Handbook to start a discussion on how parents can encourage their children to develop their personal finance skills.

• Gather variety of leaflets promoting Child Trust Fund accounts. Ask individuals to choose one of the accounts that they would consider using and explain why they have chosen that account.



30

2a.1 Birth of Child The learner is required to plan ahead financially for the birth of a child. 2a.1.1 Goals a) Know the typical financial goals of households at this life stage. b) Identify the main goals a household is likely to have when a baby is on the way. c) Suggest a likely priority for those goals. Additional guidance Learners need to know about: Top priority:

• Budget for increased spending

• Protect dependants in event of death

• Make a will Other:

• Emergency fund

• Protect income in event of illness

• Build up children’s savings

• Plan for financial costs of child’s education

2a.1.2 Resources before and just after birth a) Know about rights to maternity and paternity leave. b) Be aware of the amount of leave which can be paid leave and the amounts of statutory

maternity and paternity pay. c) Be aware of maternity allowance and the circumstances in which it may be payable. d) Be able to construct a short-term household budget covering a period of maternity

leave. e) Find out current rates of statutory maternity and paternity pay and maternity allowance. f) Be confident claiming rights at work.



31

2a.2 State and Families The learner is required to understand how the tax and benefit systems relate to children. 2a.2.1 Resources for families a) Know about state benefits available to households with children. b) Use the Internet to find current rates for the relevant state benefits. c) Be able to work out entitlement to child-related benefits in simple scenarios. d) Be able to show how a long-term household budget might change as the result of

having a child. Additional guidance Learners need to know about: Main child-related-benefits (cover amount and eligibility):

• Child benefit

• Child tax credit

• Working tax credit (in particular the childcare element)

• Widowed parent’s allowance (if widowed) Other (be aware of but do not cover in detail):

• Healthy Start vouchers and vitamins

• Free prescriptions

• Free dental treatment

• Free eye tests and vouchers for glasses

• Travel to school

• School meals

• School uniform grant

• Education maintenance allowance (covered in detail below)

2a.2.2 Tax and children a) Know that everyone is treated in the same basic way for income tax regardless of age. b) Understand how to calculate income tax. c) Understand the special treatment of a child’s income in the case of gifts from parents. d) Understand how National Insurance relates to young people. e) Use Internet sources to find current tax data. f) Assess when a child or their parents may be liable for tax. g) Make simple tax calculations. Additional guidance Learners need to know about:

• If parental gift produces income in excess of £100 a year, the whole amount (not just the excess) is taxed as that of the parent. Applies per parent per child.

• No NI below age 16.



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2a.3 Savings The learner is required to understand and compare the range of savings and investment products suitable for children. 2a.3.1 Goals and circumstances a) Understand how the trade-off between risk and return relates to short- and long-term

goals. b) Identify why parents and others might wish a child to have savings or investments. c) Consider the personal or family circumstances that might affect decisions about

children’s savings. Additional guidance Learners need to know about:

• Saving to build up lump sum to help child as reach adult life (long-term goal, higher-risk investments likely to be appropriate).

• Savings to develop money management skills (short-term, low-risk products, easy access).

• Savings to foster savings habit (short-term, low-risk products).

2a.3.2 Choosing suitable products a) Have an understanding of the function of the Child Trust Fund. b) Know about other savings and investments specifically designed for children and when

they might be useful. c) Understand how other investments can be suitable for children. d) Assess the goals and circumstances of a child and its family and suggest suitable

investments. e) Interpret an annual statement to monitor progress of savings over time. f) Choose a Child Trust Fund account and open it with confidence. g) Choose suitable savings and investments for a child with confidence. Additional guidance Learners need to know about: Purpose of Child Trust Fund, how it works, who is eligible and suitable ways to invest it, including ethical and Shariah-compliant options. Bank and building society savings accounts for children. NS&I children’s bonus bonds. Friendly society tax-efficient savings plans (baby bonds). NS&I premium bonds. Unit trusts and investment trusts.

2a.3.3 Encouraging children to be financially capable a) Understand importance for everyone of being able to manage cash, budget, save and

keep records. b) Be able confidently to encourage children to handle cash, save small amounts and take

responsibility for their money.



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2a.4 Accessing education The learner is required to know the financial implications of accessing further or higher education. 2a.4.1 Goals and circumstances a) Understand what is meant by the terms ‘further education’ and ‘higher education’. b) Identify why further or higher education might be a goal and the financial costs

associated with it. c) Consider the personal or family circumstances that might affect decisions about a

young person’s higher or further education. Additional guidance Learners need to know about: Education as a way of increasing potential earnings power later on. Family attitude towards education and employment. Possible need to bring in an income immediately. Attitude towards incurring debts, such as student loans.

2a.4.2 Further education a) Know what state help is available. b) Know about the education maintenance allowance, including who is eligible and how it

works, how to apply. c) Use the Internet to get information about the education maintenance allowance. d) Work out entitlement to education maintenance allowance. e) Apply for education maintenance allowance confidently. Additional guidance Learners need to know about: Useful information at http://ema.direct.gov.uk/ema.html



34

2a.4.3 Higher education a) Understand the system of student loans, including availability, amounts, cost and

repayment arrangements. b) Know what other financial help might be available for students. c) Be aware of the three main ways to help student children financially: out of income, by

borrowing, by saving. d) Know which savings and investments might be suitable as a way of saving up to help

student children financially. e) Understand the need to monitor progress of savings over time to meet a specified

target. f) Use the internet to find information about student loans and other financial help for

students, including being able to work out, using calculators and tables, the maintenance grant and student maintenance loans applicable to different scenarios.

g) Be able to work out expected parental contributions to student maintenance loans for different scenarios.

h) Be able to work out student loan repayments for different scenarios. i) Estimate how much to save each month to provide a target level of financial help for

student children. Learners are NOT required to know about proposed changes to student finance from 2008. Additional guidance Learners need to know about: If long-term - say more than 5 years until funds needed: unit trusts, investment trusts (consider holding within ISAs) If short-term - 5 years or less until funds needed: bank/building society/NS&I accounts (consider ISAs) For information about student loans and grants for students in England and links to information for Wales, Scotland and Northern Ireland, see www.dfes.gov.uk/studentsupport The Guide to Financial Support for Higher Education Students in 2007/2008 (322k) is available from the Forms and Guides section of www.studentsupportdirect.co.uk. For a Student loan and grant calculator, see http://www.direct.gov.uk/en/Diol1/DoItOnline/Doitonlinestudentfinance/DG_10035908



35


(Details of where to order resources can be found in the Resource Directory) Money-go-Round – CD ROM Topic - calculating the cost of childcare. This topic also looks at budgeting with relation to having children Personal Finance Handbook Chapter 1Financial planning Chapter 3 Saving Chapter 8 Tax and national insurance Chapter 9 Benefits and tax credits Chapter 10 Special groups – young people and students www.adviceguide.org.uk Citizens Advice guide covers wills in the Family section; support in further and higher education in the Education section; and employment rights in the Employment section www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm Government site giving information on tax and benefits related to children. Site also has a section on student finance within - Education and Learning. www.moneymadeclear.fsa.gov.uk Guides - Starting a family and Saving for tomorrow www.moneymatterstome.co.uk Having a baby First time parents and Managing the family sections within the Life Changes menu

2b. – Saving for the Long Term


36

Optional Unit 2b: Saving for Long term

Unit goal For learners to plan ahead in order to achieve long-term financial goals. LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

2b.1 Demonstrate an understanding of the nature of long-term goals and how this influences financial planning.

[Long term goals]

AC 2b.1.a Calculate the impact of inflation on buying power over different time periods.

AC 2b.1.b Identify whether portfolios

are low, medium or high risk according to the mix of assets from different classes.

2b.2 Demonstrate knowledge of the

main types of long-term investment products available and the key characteristics of these investments.

[Types of Products]

AC 2b.2.a Identify the main characteristics of the following investments suitable for the long term:

- shares - gilts and bonds - unit trusts - investment trusts - insurance-based investment funds.

AC 2b.2.b Extract information about

packaged investments from key features documents.

AC 2b.2.c Identify commonly used

investment terminology.

2b.3 Apply financial planning techniques in order to choose suitable generic investment products.

[Planning and choosing products]

AC 2b.3.a Identify suitable generic investment products which match different scenarios.

AC 2b.3.b Use tables to calculate the amount

of investment or monthly savings needed to achieve a savings target.



37

Teachers Guidance


• Place cards with the headings for the asset classes (Cash; Bonds; Property; Equities), in order of level of risk, on a line marked low risk at one end and high risk at the other end. Then to each of the header cards sort cards showing different investments into their asset classes. Include within the cards some that would not count as investments.

• Use the role play on savings and pensions in Face 2 Face with Finance – It’s Your Life handbook.



38

2b.1 Nature of long-term goals The learner is required to understand the nature of long-term goals and how this influences financial planning. 2b.1.1 Impact of inflation a) Understand the impact of inflation especially over the long term. b) Be able to calculate the impact of inflation on buying power over different time periods.

2b.1.2 Risk a) Understand the trade off between risk and return. b) Know about asset classes and understand how risk can be managed by mixing

investments from different asset classes. c) Be able to use Internet-based tools to mix assets from different classes to produce low,

medium and high risk portfolios. d) Be confident accessing and appraising professional advice about choice of

investments. Additional guidance Learners need to know about: Asset classes:

• Cash

• Bonds

• Property

• Equities



39

2b.2 Long-term investments The learner is required to know the main types of long-term investment products available and the key characteristics of these investments. 2b.2.1 Shares and bonds a) Know about shares and share-based investment funds. b) Know about gilts and bonds and bond-based investment funds. c) Know about other types of investment fund.

2b.2.2 Packaged investments a) Understand how investment funds may be packaged in different way - for example, unit

trusts and insurance funds - and the main features that distinguish the different packages.

b) Be able to draw information about the nature of packaged investments from key features documents.

c) Become familiar with commonly used investment terminology. d) Be confident framing and asking questions about investments.

Additional guidance Learners need to know about: Main types of investment funds:

• Unit trusts

• Investment trusts

• Insurance funds

• Pension funds



40

2b.3 General investment planning The learner is required to apply financial planning techniques in order to choose suitable generic products in various scenarios. 2b.3.1 Goals and circumstances a) Understand that financial planning for different scenarios may be influenced by

personal and other circumstances. b) Identify likely goals from scenarios. c) Use tables or internet-based calculators to quantify goals by working out the amount

that needs to be saved to achieve a given savings target.

2b.3.2 Identifying products a) Identify suitable generic investment products for different scenarios. b) Be confident choosing investments and assessing investment advice.



41

2b.4 Retirement planning The learner is required to be able to plan ahead for retirement and to apply financial planning techniques to this goal. 2b.4.1 State pension a) Know about the state basic pension, including how entitlement is built up, how this is

changing for people retiring on or after 6 April 2010 and which people are most likely to benefit from the change.

b) Know where to find information about the current amount of state basic pension. c) Be aware of the state additional pension, who is eligible, that it provides extra pension

for certain groups and how this is changing due to the Pensions Act 2007. d) Know how to get a state pension forecast. e) Know current state pension ages, how women’s age is due to change and further

changes due to the Pensions Act 2007, including who will be affected and why the changes are being made.

f) Use Internet sources to find information about state pensions. g) Be able to complete an application form for a state pension forecast. h) Be able to understand the information given on a state pension forecast. i) Be able to use The Pension Service online calculator to find out state pension ages. Additional guidance Learners need to know about: Resources on The Pension Service website www.thepensionservice.gov.uk, including pension age calculator (www.thepensionservice.gov.uk/resourcecentre/statepensioncalc.asp) and application for state pension forecast (www.thepensionservice.gov.uk/atoz/atozdetailed/rpforecast.asp)

2b.4.2 Saving for retirement a) Understand the advantages and disadvantages of saving for retirement through

personal pension schemes. b) Be aware of the main tax rules that apply to pension schemes. c) Be aware of long-term investments, other than pension schemes that could be suitable

for retirement saving. d) Understand the need regularly to review progress towards a specified target. e) Estimate likely spending in retirement and compare with expected income from state. f) Use tables or online calculators to estimate monthly savings required to provide a

target amount of pension. Additional guidance Learners need to know about: Main tax rules:

• no limit on contributions

• tax relief on own contributions only up to higher of £3,600 pa or 100% of UK earnings

• tax relief on employer contributions of any amount provided realistic given value of work you do

• any number of pension schemes and any combination of types of scheme



42

• earliest age at which start pension 55 (from 2010)

• latest age at which start pension 75. Other long-term investments, for example:

• Stocks-and-shares ISAs (investing in say unit trusts or investment trusts)

• Unit trusts or investment trusts not in ISAs

• Property (own home, buy-to-let) - high risk

• Real Estate Investment Trusts (from 1 January 2007)

2b.4.3 Occupational pension schemes a) Understand the advantages and disadvantages of saving through an occupational

pension scheme. b) Be aware of government proposals to introduce a national scheme of pension accounts

with compulsory employer contributions unless the employee opts out. c) Understand the meaning of ‘defined benefit’ and ‘defined contribution’ and know

broadly how each type of scheme works, including what an annuity is. d) Be aware of who bears the risks with different types of pension scheme. e) Be able to interpret a benefit statement from an occupational pension scheme. f) Be confident seeking information about a pension scheme at work.

2b.4.4 Personal pensions a) Be aware that these are all defined contribution schemes. b) Understand the main differences between different types of personal pension. c) Understand that personal pensions may be available through the workplace or

arranged independently. d) Understand the investment choices that are available. e) Be able to complete an application form for a personal pension. f) Be confident starting a personal pension and choosing how to invest the contributions. Additional guidance Learners need to know about: Different types of personal pension:

• Ordinary personal pensions

• Group personal pension schemes

• Stakeholder pension schemes

• Self-invested personal pensions Investment choices (including ethical and Shariah-compliant options):

• Unit-linked versus with-profits

• Different types of unit-linked funds, for example:

• Money funds

• Gilt and bond funds

• UK equity funds

• International funds

• Single country funds

• Lifestyle funds



43

2b.4.5 Interaction between state provision and private savings a) Understand broadly how the pension credit works and why it was introduced. b) Understand how means-tested benefits can be a disincentive to save for retirement

and how government proposals for change aim to address this problem.



44


(Details of where to order resources can be found in the Resource Directory) NatWest Face 2 Face with Finance It’s Your Life Handbook – case studies, simulations, activities and resources linked with financial planning Personal Finance Handbook Chapter 1 Financial planning Chapter 3 Saving Chapter 5 Pensions Short Programmes Series of 10 3-hour session plans on a variety of financial themes, including ‘Saving for the Future’ www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm Government site giving information on pensions and savings and investments www.moneymadeclear.fsa.gov.uk Guides - Saving for tomorrow and Retiring soon Products explained - Investments and Pensions Useful tools - Pension calculator www.moneymatterstome.co.uk Where money comes from Pensions Where money goes Savings and investment

3a – Money and the Family


45

Optional Unit 3a: Money and the Family

For learners to be able to make appropriate choices where they share their financial arrangements. LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

3a.1 Know how to balance individual and household goals. [Balancing goals]

AC3a.1.a Identify and adapt household and individual goals for a range of scenarios taking into account possible changes in household composition. AC3a.1.b From a range of scenarios, identify household budgeting arrangements suitable for different ways of sharing income.

3a.2 Know how different life events affect a household and how it is possible to plan ahead to cope with such events.

[Life events]

AC3a.2.a Identify how a household budget may be affected by unemployment, illness or death within the household. AC3a.2.b Identify the financial support available from the state and employers in the event of:

- unemployment within household - illness within household - death within household.

AC3a.2.c Identify the financial products available to protect household finances in case of unemployment within household. AC3a.2.d Identify the financial products available to protect household finances in case of illness within household AC3a.2.e Identify the financial products available to protect household finances in case of death within household.



46

LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

3a.3 Understand the implications of sharing assets/debts within a household.

[Sharing finances]

AC3a.3.a From a range of scenarios, identify the legal and financial implications for family/household members of the following:

- Holding assets individually - Holding assets jointly including the

distinction between joint tenants or tenants in common

- Taking on joint debts - Taking on individual debt secured against

joint assets. AC3a.3.b For a range of scenarios carry out simple income tax calculations. AC3a.3.c Compare the implications for the family of holding assets individually and jointly in respect of income tax.

AC3a.3.d Work out the implications for the family of transferring assets between family members in respect of capital gains tax and inheritance tax.



47

Teachers Guidance


• As a whole group brainstorm different possible household compositions. Give pairs a household each for them to identify possible household and individual goals. Each pair to discuss how to accommodate household and individual goals and how these may need to change if composition changes. Present findings back to the whole group.

• Divide the whole group into small groups. Share out the three life events covered in the unit. Small groups investigate how a budget may be affected by the life event, what state and/or employer support is available and what generic products are available to protect the budget. Use a mind map to organise the information found. Share information.

• Discuss how to search for information on the Internet and how to decide if a source is reliable. In pairs use the Internet to find current data for income tax, capital gains and inheritance tax. Share the sources and agree which will be them most reliable and up-to-date.



48

3a.1 Balancing Goals The learner should be able to balance individual and household goals into account possible differences of household composition 3a.1.1 Identifying goals a) Identify household and individual goals for a range of scenarios and assess whether

these goals conflict. Additional guidance Learners need to know about: Importance of having a Will when sharing finances.

3a.1.2 Adapting goals a) Understand options for combining household goals and individual goals. b) Understand how household composition may change over time. c) For a range of scenarios, adapt household goals to accommodate individual goals,

particularly taking into account how household composition might alter in future. d) Be aware of the impact financial decisions may have on other family members. Additional guidance Learners need to know about: Change:

• Cohabitation (couples, siblings, others)

• Marriage, civil partnership

• Children

• Separation, divorce

• Move to care home

• Death

3a.1.3 Household budgeting a) Understand different ways in which households can share income in order to meet

household spending needs. b) Understand importance of financial records. c) Construct household budgets suitable for different ways of sharing income. d) Use internet sources to check terms and conditions applying to joint bank accounts. e) Be confident discussing financial arrangements concerning income with family

members. Additional guidance Learners need to know about: Ways to share:

• Earner controls household spending

• Non-earner controls household spending

• All household members jointly control spending

• Earner pays some income to non-earners

• Multiple earners pool earnings and jointly control spending



49

• Multiple earners retain own earnings and responsible for different areas of spending Financial records such as bank and credit card statements Importance of monitoring joint financial arrangements



50

3a.2 Life events The candidate should understand how different life events affect a household and how it is possible to plan ahead to cope with such events. 3a.2.1 Coping with unemployment a) Understand how a household budget may be affected by unemployment of a family

member. b) Know what financial support is available from the state and/or an employer in the event

of unemployment. c) Know about suitable generic products to protect the household budget in the event of

unemployment. d) Use internet sources to find data on current rates of state benefits available in the

event of unemployment. e) Be confident discussing needs with a financial adviser. Additional guidance Learners need to know about: Main state support:

• Jobseeker’s allowance

• New Deal programmes If income low:

• Income support

• Housing benefit

• Council tax benefit Employer support:

• Redundancy pay Financial products:

• Emergency fund

• Mortgage payment protection insurance

• Other accident, sickness and unemployment insurance/loan payment protection insurance

3a.2.2 Coping with illness a) Understand how a household budget may be affected by the illness of a family

member. b) Know what financial support is available from the state and/or an employer in the event

of illness. c) Know about generic products that address health problems and how well they meet

specified needs. d) Use internet sources to find data on current rates of state benefits available in the

event of illness. e) Be confident discussing needs with a financial adviser.



51

Additional guidance Learners need to know about: Main state support:

• Statutory sick pay (paid through employer)

• Incapacity benefit

• Disability living allowance If income low:

• Income support

• Housing benefit

• Council tax benefit Possible employer support:

• Extended sick pay scheme

• Group income protection insurance

• Early retirement/ ill health pension

• Private medical insurance

• Health cash plans Financial products:

• Emergency fund

• Income protection insurance

• Mortgage payment protection insurance

• Other accident, sickness and unemployment insurance/loan payment protection insurance Critical illness insurance

• Private medical insurance

• Health cash plans

3a.2.3 Coping with death a) Understand how a household budget may be affected by the death of an adult

member. b) Know what financial support might be available from the state and/or an employer in

the event of death. c) Know about suitable generic products to protect the household budget in the event of

death. d) For different scenarios, draw up an estimated budget for a household following the

death. e) Use internet sources to find data on current rates of state benefits available in the

event of death. f) For a range of scenarios, use internet sources to shop around for suitable life cover. g) Be confident selecting specific products suitable for particular scenarios. Additional guidance Learners need to know about: Main state support:

• Bereavement benefits If income low:



52

• Working tax credit

• Income support

• Housing benefit

• Council tax benefit Possible employer support:

• Lump sum life cover

• Dependant’s pension Financial products:

• Term insurance (lump sum or family income benefit) including pension term insurance

• Maximum protection (whole life) cover



53

3a.3 Sharing wealth/debt The learner should be able to understand the implications of sharing assets/debts within a household. 3a.3.1Sharing wealth a) Identify reasons why household members might wish to share wealth. b) Identify situations in which sharing wealth may protect individual members.

3a.3.2 Tax considerations a) Know how a person is taxed as an individual. b) Know the main exemptions from capital gains tax. c) Know the main exemptions from inheritance tax. d) Calculate income tax for simple scenarios. e) Use internet sources to find current data for income tax, capital gains and inheritance

tax. Additional guidance Learners need to know about: Main Capital Gains Tax exemptions:

• Gifts between husbands and wives/ civil partners (rather than exempt, potential tax bill is transferred to new owner)

• Main home

• Up to annual tax-free allowance Main Inheritance Tax exemptions:

• Gifts between husbands and wives/ civil partners (limited if recipient’s permanent home is not UK)

• Gifts on marriage

• Regular gifts out of income

• Up to £250 per person

• £3,000 a year

• Potentially exempt transfers

• Running total over seven years up to nil-rate band

3a.3.3 Sharing existing wealth a) Know the two different ways to hold assets (the family home and/or other assets) and

variations for Scotland. b) Understand the tax implications of transferring an asset into joint names given different

relationships between the co-owners. c) Be confident discussing financial arrangements concerning existing wealth with family

members. Additional guidance Learners need to know about: Assets most commonly held jointly:

• Bank and building society accounts

• Shares



54

• Property Hold assets (whether property or not)- England:

• Joint tenants

• Tenants in common Scotland: joint or common assets usually broadly equivalent to England’s tenants in common, but a survivorship destination clause makes them broadly equivalent to English joint tenancy. (However, on death, legal rights can override anything written in a will.) Different relationships between the co-owners could include: spouses or civil partners, unmarried couple, parent and adult child

3a.3.4 Sharing savings a) Identify situations in which building up household savings in individual names may

protect individual members. b) Use Internet sources to shop around for a stakeholder pension for a family member. c) Be confident discussing financial arrangements concerning savings with family

members.

3a.3.5 Sharing debts a) Understand which debts may be shared and which are not. b) Understand the possible implications for other family members of an individual debt

that is a secured loan. c) Use internet sources to check the terms and conditions relevant to sharing a mortgage. Additional guidance Learners need to know about: Shared debts - examples:

• Joint mortgage

• Overdraft on joint bank account

• Loan taken out in joint names

• Loan secured on jointly owned assets Debts not shared - examples:

• Overdraft on account in one person’s name

• Loan taken out in single name

• Loan secured on assets owned solely by the borrower Other: Credit card normally in one person’s name only but a second or further person can be issued with a card for that account. The account holder is then liable for the debts of all the card users. But the additional card user(s) not legally liable for the debts on the account.



55


(Details of where to order resources can be found in the Resource Directory) Personal Finance Handbook Chapter 6 Insurance Chapter 8 Tax and national insurance Chapter 9 Benefits and tax credits Chapter 10 Special groups – redundancy Short Programmes Series of 10 3-hour session plans on a variety of financial themes, including ‘Why bother with insurance?’ www.adviceguide.org.uk Citizens Advice guide – sections on Benefits, Employment, Tax and Family www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm and www.direct.gov.uk/Employment Government site giving information on tax, benefits and employee rights www.moneymadeclear.fsa.gov.uk Guides - Are you covered? Products explained - Insurance www.moneymatterstome.co.uk Sections within the Life Changes menu

3b – Money and running a home


56

Optional Unit 3b: Money and running a home

Unit goal For learners to be able to: manage the main financial products and services related to their home. LEARNING OUTCOMES

ASSESSMENT CRITERIA

The learner will:

The learner can:

3b.1 Be able to compare the merits and legal obligations of renting or buying a property.

[Renting versus buying]

3b.1.a Identify and compare the advantages and disadvantages of:

- renting a property - buying a property.

3b.1.b Identify a tenant’s and landlords legal

responsibilities for a given scenario.

3b.2 Have an understanding of the main stages of buying a property and the financial costs involved.

[Buying and mortgages]

3b.2.a Identify the main costs involved in buying a property for a given scenario.

3b.2.b Identify the procedures when buying

property including variations that apply in Scotland.

3b.2.c Identify the main features of and risks

inherent in different types of mortgage. 3b.2.d Calculate the amount of equity in a

property for different scenarios.

3b.3 Demonstrate knowledge of home related insurance services.

[Insurance Services]

3b.3.a Choose appropriate household insurance to match a consumer’s needs/wants and circumstances.

3b.3.b Identify types of claim that can be made

against household insurance and complete an insurance claim form for a given scenario.

3b.4 Demonstrate knowledge of

how to minimise household bills.

[Household Bills]

3b.4.a Calculate the best deal obtained when changing utility supplier from a range of scenarios.

3b.4.b Identify ways of minimising household bills

for different scenarios. 3b.4.c Identify the consequences of not paying

household bills.



57

Teachers Guidance


• Discuss what you might want to find out about if you intend to rent or buy a property. Agree a list of questions that learners need answers to. Visit the Home and Community section of the Direct Gov. website to look for answers. Compare answers.

• Individuals to compare the advantages and disadvantages of renting and buying using a comparison table.

• Use the FSA comparison tables to shop around for different financial products. www.fsa.gov.uk/tables

• Explore the Home improvements section of the Energy Savings Trust - http://www.energysavingtrust.org.uk/home_improvements



58

3b.1 Rent or buy The learner is required to compare the merits and legal obligations of renting or buying a property. 3b.1.1 Renting a) Understand the legal obligations of a tenant and the implications of not paying rent. b) Understand the legal obligations of a landlord c) Identify advantages and disadvantages of renting. d) Use Internet sources to find guidance for tenants. e) Be confident in dealings with a landlord. Additional guidance Learners need to know about: Advantages:

• No external maintenance costs

• Repairs are someone else’s responsibility to arrange

• Buildings insurance normally paid for by landlord

• Mobility - can move easily e.g. if change job or neighbourhood becomes less desirable

Disadvantages:

• Rent often seen as ‘dead money’ - do not build up any equity

• Constraints on what you do to the property

• May be constraints on how you use the property - for example, on running a business or taking in a lodger

3b.1.2 Buying a) Identify advantages and disadvantages of buying own home with a mortgage. b) Identify advantages and disadvantages of owning own home outright. c) Understand the implications of not paying the mortgage. d) Use Internet sources to identify home prices in the local area. Additional guidance Learners need to know about: Advantages:

• Build up equity in home - may allow you to afford a larger property later or you might withdraw the equity e.g. to boost income in retirement

• Large degree of freedom to alter and adapt the property

• Large degree of freedom on how you use the property (though may be covenants restricting use and mortgage lender might object to lodgers)

Disadvantages:

• Maintaining property may be costly

• You are responsible for identifying when repairs are needed and arranging them

• Cost of buildings insurance

• May be difficult to sell if you need to move (e.g. for work reasons)

• Change in neighbourhood - e.g. permission for a new road - may damage value of property



59

• Fall in housing market may leave you owing more in mortgage than the property is worth (negative equity).

3b.1.3 Compare renting and buying a) Summarise and compare the advantages and disadvantages of renting and buying.



60

3b.2 Buying a Home and Mortgages The learner is required to have an understanding of the main stages of buying a property and the financial costs involved. 3b.2.1 Cost of buying a home a) Broadly know the procedure for buying a home including home information packs. b) Be aware of the variations in house buying procedures that exist in Scotland. c) Know the main costs involved in buying a home. d) Be able to calculate stamp duty land tax given market price of a home. Additional guidance Learners need to know about: Stages of buying a home in England and Wales:

• Decide on a property

• Make an offer

• Apply for mortgage

• Get a valuation

• Appoint a solicitor

• Legal work: including conveyancing, paying deposit, arranging buildings insurance, exchanging contracts, completing

Stages of buying a home in Scotland:

• Decide on a property

• Appoint a solicitor

• Apply for mortgage

• Get a valuation

• Make an offer

• Legal work: including conveyancing, arranging buildings insurance, concluding missives, completing

Main costs of buying a home: deposit, stamp duty land tax, legal fees, valuation fees and mortgage fees such as higher lending fees and arrangement fees. Two key sources for learning about the procedure for buying a house are:

• for England and Wales, www.cml.org.uk in particular the free publication 'The CML guide to home-buying in England and Wales' from http://www.cml.org.uk/cml/consumers/guides;

• for Scotland, http://scotland.shelter.org.uk/advice/index.cfm. Go to Finding a place to live - Buying a home.

3b.2.2 Mortgages a) Know the two main types of mortgage (repayment and interest only) and the

advantages and disadvantages of each. b) Know the main interest rate and other deals (including flexible mortgages and all-in-one

mortgages) and the circumstances in which each deal might be suitable. c) Understand importance of monitoring investments intended to pay off an interest-only

mortgage.



61

d) Be able to match suitable mortgages to a variety of scenarios. e) Use Internet sources to estimate the affordability of mortgages in different scenarios. f) Use Internet sources to shop around for mortgages for different scenarios. g) Be able to interpret information given in a key features illustration. Additional guidance Learners need to know about: Types of mortgage:

• Repayment

• Interest-only (endowment, ISA, pension, other) Main interest rate and other deals:

• Standard variable rate

• Tracker

• Discounted rate

• Fixed rate

• Capped rate

• Cashback

• Flexible mortgage

• All-in-one (current account) mortgage

• Shariah-compliant mortgages, in particular, Ijara mortgage

3b.2.3 Equity a) Understand the concept of ‘equity’ as the value of the home net of outstanding

mortgage(s). b) Be aware of shared equity schemes in order to reduce the cost of buying a home. c) Be able to calculate the value of equity in a home for different scenarios.



62

3b.3 Home-related insurance The learner is required to be able to choose and shop around for home related insurance products. 3b.3.1 Buildings insurance a) Have an understanding of buildings insurance b) Know when buildings insurance is required and who is responsible for arranging it. c) Use internet sources to estimate the rebuilding costs of various types of home. d) Use internet sources to shop around for buildings insurance given different scenarios. Additional guidance Learners need to know about: What building insurance covers, what it does not cover and the factors that affect the premium

3b.3.2 Contents insurance and possessions insurance a) Have an understanding of contents insurance. b) Know what possessions insurance is. c) Use Internet sources to shop around for contents insurance given different scenarios. d) Choose whether it is appropriate to take out contents/possessions insurance given

different scenarios. e) Be able to complete a claim form for a given scenario. Additional guidance Learners need to know about: Understanding of contents insurance to include:

• what it covers,

• what it does not cover

• the factors that affect the premium.

• when contents insurance is appropriate,

• whose responsibility it is to arrange it

• insurance-with-rent schemes.)

• if use a broker to buy insurance they will help you make the claim. What possessions insurance covers, what it does not cover and the factors that affect the premium.

3b.3.3 Extended warranties a) Have an understanding of extended warranties on household goods. b) Choose whether it is appropriate to take out an extended warranty given different

scenarios.



63

3b.4 Household bills The learner is required to know how to minimise household bills. 3b.4.1 Suppliers a) Understand that there is a choice of supplier for most household services and be aware

of the criteria that people might use to choose their supplier(s), e.g. ‘green’ electricity. b) Know how to switch from one supplier to another. c) Use Internet sites to shop around for suppliers and estimate savings as a result of

switching supplier. d) Be confidently able to switch supplier.

3b.4.2 Method of payment a) Know the advantages and disadvantages of paying bills by direct debit. b) Be aware of the different consequences of not paying utility bills, including TV licence. c) Use Internet sources to shop around for a bank account offering direct debit facilities

given various scenarios. d) Can estimate the savings to be made by paying by direct debit. e) Be able to fill in a direct debit mandate.

3b.4.3 Saving energy a) Have an understanding that energy saving measures can help reduce utility bills. b) Use Internet sources to find energy saving advice.



64


(Details of where to order resources can be found in the Resource Directory) Personal Finance Handbook Chapter 4 Borrowing Chapter 6 Insurance Short Programmes Series of 10 3-hour session plans on a variety of financial themes, including ‘Choosing and using utilities’ www.adviceguide.org.uk Citizens Advice guide – section on Housing www.cml.org.uk Council of Mortgage Lenders site – buying a house in England and Wales http://scotland.shelter.org.uk/advice/index.cfm Scottish website of the housing charity, Shelter - buying a house in Scotland www.direct.gov.uk/en/HomeAndCommunity/index.htm Government site giving information related to housing http://www.energysavingtrust.org.uk/home_improvements The Energy Savings Trust identifies ways in which energy and money can be saved. www.fsa.moneymadeclear.gov.uk Guides - Are you covered? Products explained - insurance www.moneymatterstome.co.uk Spending money and budgeting Paying the bills

Resource Directory


65

Resource Directory

Title

Publisher Price Ordering details

Cashwise @ Work BBC Free Download from www.bbc.co.uk/cashwise

NatWest Face 2 Face with Finance materials

National Westminster Bank Plc

Free Order from www.natwestf2f.com

Personal Finance Handbook

Child Poverty Action Group

£14.00 ISBN 1-901698-74-2

Short Programmes

Basic Skills Agency

Free Download from www.money-bsa.org.uk

The Red Box

HM Treasury Free www.hm-treasury.gov.uk

CD ROMs Money-go-Round Basic Skills

Agency

£15 www.basic-skills.co.uk

MoneyPower

Basic Skills Agency

£15 www.basic-skills.co.uk

Websites Citizens Advice guide www.adviceguide.org.uk Council of Mortgage Lenders www.cml.org.uk Shelter Scotland http://scotland.shelter.org.uk Direct Government www.direct.gov.uk/Employment Energy Savings Trust http://www.energysavingtrust.org.uk Financial Services Authority www.fsa.moneymadeclear.gov.uk HM Revenue and Customs www.hmrc.gov.uk Money Matters To Me (NIACE) www.moneymatterstome.co.uk

Coverage of the Adult Capability Framework


66

Coverage of the Adult Financial Capability Framework Unit 1a Unit 1b Unit 2a Unit 2b Unit 3a Unit 3b D(b) 2 2 2 2 E(a) 3 3 1,3 1,3 E(b) 1,3 1 3 1,2,3 1,3 E(c) 2 2 1,2 1,2 1,2 1,2 E(d) 1,3 3 1,4 1 4 E(e) 3,4 1,2 1,2,3 1 1,2,3 E(f) 4 4,5 1,3 1,2,3,5 E(g) 2 10 1,2,4,7,10,11 1,4,7,8 2,3,4,8 2,3,4,5,6,8 E(h) 1,2,3,4,5 1,3,4 3 1,2 1,2,3,4 3,4 E(i) 6 4,5,6,7 1,2,6 1,5,6 1,2 1

NOS – Generic Financial Advice


67

Coverage of the National Occupational Standards for the Financial Services Sector

Generic Financial Advice

Knowledge and understanding General Units 1,

1a, 1b Units 2, 2a, 2b

Units 3, 3a, 3b

Unit 4

1. Understand what is meant by generic financial ‘advice’ and the rules that currently apply to the different types of advice.

4.2.1

2. Demonstrate knowledge of the principles of business ethics and integrity as set by relevant financial codes of conduct.

3. Understand the major life stages/events that can affect finances. 2.1.2 4. Understand the importance of the ownership of assets in improving financial prospects

throughout life. 3a.3.1,

3a.3.2

5. Understand and explain the basic principles of taxation. 1a.1.2, 1a.1.3-5

2a.2.2 3a.3.2

6. Know the main types of financial services options and solutions available and how they are paid for.

1.1.1-2 1.2.2-3 1.3.4 1a.3.1-2

2.2.1 2.3.1-6 2a.3.2 2a.4.3 2b.2.1-2 2b.3.2 2b.4.2-5

3.1.1 3.2.1 3a.2.1-3 3b.2.2-3 3b.3.1-3

4.2.1

7. Know the key organisations and consumer protection bodies and the roles they play within the provision of financial services.

4.3.1, 4.3.3

8. Be aware of relevant regulations and legislation applying to Generic Financial Advice. 9. Be able to recognise potential areas of benefits and/or tax credits that might apply to the

consumer, the conditions applying to them and where to refer the consumer to obtain further information.

Unit 1b 2a.2.1

10. Know how to collect, record and interpret the information given so that you can explain things clearly to the consumer including what the consumer has to do next.

Income and budgeting, debt and borrowings 1. Demonstrate and have knowledge of the differences between debt and borrowing, alternative

debt remedies and when referral to a specialist debt adviser is needed. 1.3.4 2.3.1 4.4.1

2. Be able to explain the relevance of credit scoring and credit records; understand the basic 1.4.4 3.1.1,



68

types of credit arrangement (e.g. credit cards, mortgages) and be able to explain the benefits and risks of borrowing through this method.

3.2.1

3. Have knowledge of basic banking services and products and the benefits they may provide. 1.1.1, 1.1.2

3.1.1, 3.2.1

4. Have knowledge of the different types of loans (secured, unsecured, Government backed e.g. student) and the potential risks of debt consolidation.

2.3.1, 2a.4.3

3.1.1

5. Be able to discuss budgeting and the concept of shopping around for better deals on services and products (such as utilities, credit cards and borrowing and general insurances).

1.2.1, 1.3.1, 1.3.2

3.2.1, 3.3.1, 3a.1.1, 3b.4.1

6. Know and understand the purpose and principles underpinning mortgage lending and the main features of the principal types of mortgage available to consumers.

3.1.1, 3b.1.2, 3b.2.2

Protection 1. Understand the different types of life assurance (including provision for long term care) and how

they may apply to the consumer’s circumstances. 2.1.3,

2.2.1, 2.3.5

3.1.1, 3.2.1, 3a.2.2

2. Know the concepts and principles underpinning all insurance contracts and have an awareness of how underwriting works.

2.1.3, 2.2.1, 2.3.3

3.1.1

3. Know the basic procedures for making insurance claims. 3b.3.2 4. Understand the differences in tax treatment for the main types of insurance policy both for

premiums paid and in the event of a claim.

5. Have a basic knowledge of death benefits under retirement contracts and other employee protection benefits.

1a.3.1, 1a.3.2

3a.2.1, 3a.2.3

6. Know the main state benefits that may be available including those relating to ill health (incapacity).

1b.1-4 2a.2.1 3a.2.2

7. Know the advantages of having a Will and the main uses of simple trusts. 2a.1.1 3a.1.1 Savings and Investments 1. Be aware of different types of risk including economic, investment, and time, personal and

moral. 3.2.1

2. Be able to explain the value of having some provision for emergencies and the different ways it might be achieved.

2.3.2

3. Have a working knowledge of basic banking and National Savings products and the benefits they may provide.

3.1.1

4. Understand and be able to explain at a basic level the different forms of investments including interest bearing products, equities and equity backed products, investment trusts and property and the risks associated with investing in each.

2b.2.1, 2b.2.2, 2b.3.2

3.1.1



69

5. Have a basic knowledge of taxation relating to savings products. 3.1.1 6. Be aware of products and services that have a religious / ethical theme such as Islamic finance

and ethical funds. 3.1.1,

3.2.1

7. Know how to get a state pension forecast (BR 19 Application for a Retirement Pension Forecast), what pension credit is and where to find relevant information.

2b.4.1, 2b.4.5

8. Know where to find help and information on contracting back into the state second pension S2P.

9. Have a basic understanding and be able to explain state and non-state pension options. 2b.4.1-4 Healthy, Safe and Effective Working Environment 1. – 4. n/a n/a n/a n/a

Level 2 Key Skills


70

Underpinning Level 2 Key Skills

Due to the length of the optional units it was felt appropriate to highlight the underpinning Key Skills required at Level 2, but not to show how evidence for the Key Skills assignments could be provided. In working towards the units Level 2 Key Skills are required and where particular skills will be needed they have been identified. Key Skills 1a 1b 2a 2b 3a 3b Communication Use varied vocabulary and expressions

1a.1.3 1a.3.1,2 1a.4.1

2b.2.2

Take part in a discussion 3a.1.1 3a.2.1,2 3a.3.3,4

Skim, scan and read in depth

2b.2.2 3b.2.2

Understand key terminology 2b.2.2 Read and complete a form 1a.1.3 1b.4.1 2b.4.1

2b.4.4 3b.3.2

3b.4.2 Write formal letters 1a.4.2 Application of Number Read and understand numbers

2b.4.1 2b.4.3

Get relevant numerical information

1a.1.3 1a.1.5

Carry out calculations 1a.3.1 1b.1.2,3 1b.2.3 1b.2.6

2a.4.3 3a.2.3 3b.2.3

Estimate amounts 1a.2.1 2a.4.3 2b.4.2 3b.4.2 Work with decimals 1a.2.1 2a.2.2 Work with percentages 1a.2.1

1a.3.1 2a.2.2 2b.1.1 3a.3.2 3b.2.1

Use formulae 1a.1.3 1a.1.5

Read and understand tables 2a.3.2 Interpret numerical information and present findings

2a.1.2 2a.2.1 2a.3.2

3a.2.3

ICT Search for information on the Internet

1a.1.5 1a.4.2

1b.1.1 1b.2.1 1b.2.3 1b.4.2

2a.2.1,2 2a.4.2,3

2b.4.1 3a.1.1 3a.2.1-3 3a.3.2 3a.3.4,5

3b.1.1,2 3b.2.2 3b.3.1,2 3b.4.1-3

Enter information on the Internet

2b.1.2 2b.2.2 2b.4.2

3b.2.2

Coverage of ECDL


71

Coverage of the European Computer Driving Licence

The following skills, knowledge and understanding needed for the ECDL modules can be taught using a personal finance context. For example, a document to be word processed could be a letter to the bank which would be a direct use of the context whilst mail merging would be indirect as it wouldn’t naturally arise in looking at personal finance but could be covered as banks will use mail merge to send out letters. The skills, knowledge and understanding needed from the ECDL to underpin Personal Finance are those to be found in Module 4 - Spreadsheets (4.1, 4.2, 4.4, 4.5 and 4.7) and Module 7 – Information and Communication (7.1, 7.2 and 7.3). These have been referenced within the appropriate syllabuses. Module Category Personal

finance context

1 Concepts of IT 1.1-1.8

None

2 Using the computer and managing files

2.1-2.5 Indirectly

3.1 Using the application Directly 3.2 Main application Directly 3.3 Formatting Directly 3.4 Objects Indirectly 3.5 Mail merge Indirectly

3 Word processing

3.6 Prepare outputs Directly 4.1 Using the application Directly 4.2 Cells Directly 4.3 Worksheets Directly 4.4 Formulas and

functions Directly

4.5 Formatting Directly 4.6 Charts/graphs Indirectly

4 Spreadsheets

4.7 Prepare outputs Directly 5 Database 5.1-5.6

Indirectly

6 Presentation 6.1– 6.6

Indirectly

Information and Communication

7.1 The Internet Directly

7.2 Web navigation Directly 7.3 Web searching Directly

7.4 Electronic mail Indirectly 7.5 Messaging Indirectly

7

7.6 Mail management Indirectly

Coverage of PSHE Curriculum


72

PSHE Curriculum

• PSHE is an optional subject not offered by all schools. It covers a range of areas, including careers advice, and it will be optional for schools to include any of the economic elements.

• The economic elements are economic well-being and financial capability.

• The economic elements relevant to this Level 2 course are shown below.

• Some aspects of personal finance also come into the mathematics curriculum - see below. The following mapping between the PSHE curriculum at Key Stage 4 and the four mandatory units has been identified. Where no mapping exists across all four units, the PSHE curriculum reference has not been included. PSHE (Key Stage 4)

Unit 1a Understanding Money at Work

Unit 1b Understanding State Benefits

Unit 2a Money and Children

Unit 2b Saving for the Long Term

Unit 3a Money and the Family

Unit 3b Money and Running your Home

1. Key concepts 1.2 Capability b) Learning how

to manage money and personal finances

1a.1, 1a.2, 1a.3, 1a.4

1b.1, 1b.2, 1b.3, 1b.4

2a.1, 2a.2, 2a.3, 2a.4

2b.1, 2b.2, 2b.3, 2b.4

3a.1, 3a.2, 3a.3

3b.1, 3b.2, 3b.3, 3b.4

d) Becoming critical consumers of goods and services.

1a.3. 1a.4 2a.3 2b.1, 2b.2, 2b.3, 2b.4

3a.2 3b.1, 3b.2, 3b.3, 3b.4

1.3 Risk a) Understanding risk in both positive and negative terms.

1a.3 2a.3 2b.1 3a.3 3b.2, 3b.3

b) Understanding the need to

2b.1 3a.2, 3a.3 3b.2, 3b.3



73

manage risk in the context of financial choices.

c) Taking risks and learning from mistakes.

2b.1 3b.3

1.4 Economic understanding

a) Understanding the economic and business environment.

1a.1, 1a.3, 1a.4

1b.1 2b.1, 2b.2, 2b.3, 2b.4

3b.1, 3b.4

b) Understanding the functions and uses of money.

1a.1

2. Key processes 2.1 Self development

c) Assess their needs and attitudes in relation to options in learning, work and enterprise.

1a.4 1b.1 2a.4

2.2 Exploration a) Identify, select and use a range of information sources to research, clarify and review options and choices … in financial contexts relevant to their needs.

2b.1 3a.3 3b.2, 3b.3, 3b.4



74

2.4 Financial capability

a) Manage their money.

1a.1, 1a.2, 1a.3, 1a.4

1b.1, 1b.2, 1b.3, 1b.4

2a.1, 2a.2, 2a.3, 2a.4

2b.1, 2b.2, 2b.3, 2b.4

3a.1, 3a.2, 3a.3

3b.1, 3b.2, 3b.3, 3b.4

b) Understand financial risk and reward.

2a.3 2b.1, 2b.3 3a.3 3b.2

c) Explain financial terms and products.

1a.2,1a.3 1b.1, 1b.2, 1b.3

2a.1, 2a.2, 2a.3, 2a.4

2b.1, 2b.2, 2b.3, 2b.4

3a.1, 3a.2, 3a.3

3b.1, 3b.2, 3b.3, 3b.4

d) Identify how finance will play an important part in their lives and in achieving their aspirations.

1a.3 2a.1 2b.3, 2b.4 3a.1, 3a.2 3b.1, 3b.2

3. Range and content a) Different types

of work, including employment, self-employment and voluntary work.

1a.1

e) The personal review and planning process.

1a.3 2a.1, 2a.3, 2a.4

2b.3, 2b.4 3a.1, 3a.2 3b.2

g) Range of economic and business terms including connections between markets, competition, price and profit.

2b.2, 2b.4



75

h) Personal budgeting, wages, taxes, money management, credit, debt and range of financial products and services.

1a.1, 1a.2, 1a.3, 1a.4

1b.1, 1b.2, 1b.3, 1b.4

2a.1, 2a.2, 2a.3, 2a.4

2b.1, 2b.2, 2b.3, 2b.4

3a.1, 3a.2, 3a.3

3b.1, 3b.2, 3b.3, 3b.4

i) Risk and reward and how money can make money through savings, investment and trade.

1a.3 2a.3 2b.1, 2b.2 3b.1, 3b.2

j) How and why businesses use finance.

2b.2

k) Social and moral dilemmas about the use of money.

1a.4 1b.4 2b.3 3a.1

4. Curriculum opportunities a) Case studies,

simulations, scenarios, role play, drama enterprise.

1a.4 1b.1, 1b.2, 1b.4

2a.2, 2a.3 2b.3 3a.1, 3a.2, 3a.3

3b.2, 3b.3, 3b.4

f) Contact with information,

1a.1



76

advice and guidance specialists.

k) Make links between economic well-being and financial capability and other subjects and areas of the curriculum.

Key Skills, Maths

Key Skills, Maths

Key Skills, Maths

Key Skills, Maths

Key Skills, Maths

Key Skills, Maths

Coverage of Maths Curriculum


77

Maths Curriculum

Most of the Key Concepts and Processes at Key Stage 4 can be developed alongside working towards this Personal Finance qualification. In particular: 1. Key Concepts

1.1 Competence a) Applying suitable mathematics accurately within the classroom and beyond. c) Selecting appropriate mathematical tools and methods, including ICT.

1.2 Creativity

b) Using existing mathematical knowledge to create solutions to unfamiliar problems.

1.3 Applications and implications of mathematics b) Understanding that mathematics is used as a tool in a wide range of contexts.

1.4 Critical understanding

b) Recognising the limitations and scope of a model or representation. 2. Key processes

2.1 Representing Students should be able to: a) Identify the mathematical aspects of the situation or problem. d) Select mathematical information, methods, tools and models to use.

2.2 Analysing Use mathematical reasoning

Students should be able to: i) Identify a range of techniques that could be used to tackle a problem; appreciating that more than one approach may be necessary



78

Use appropriate mathematical procedures Students should be able to: i) calculate accurately, using mental methods or calculating devices as appropriate. p) estimate, approximate and check working.

2.3 Interpreting and evaluating

Students should be able to: g) Critically examine strategies adopted.

2.4 Communicating and reflecting

Students should be able to: a) Use a range of forms to communicate findings to different audiences e) Give examples of similar contexts they have previously encountered and identify how these contexts differed from or were similar to the current situation and how and why the same, or different, strategies were used.

Personal Finance provides a Curriculum Opportunity in a context beyond school, with a variety of naturally occurring open and closed tasks. However, the range and content will be limited. Elements of the following range and content from the mathematics Key Stage 4 curriculum will be required for the Personal Finance components as indicated.

Maths (Key Stage 4)

Unit 1a Understanding Money at Work

Unit 1b Understanding State Benefits

Unit 2a Money and Children

Unit 2b Saving for the Long Term

Unit 3a Money and the Family

Unit 3b Money and Running your Home

3.1 Number and algebra b) Rules of arithmetic applied to calculations and manipulations with real numbers, including standard index form and surds

1a.1, 1a.2, 1a.3 1b.1, 1b.2 2a.1, 2a.2, 2a.4

3a.1, 3a.2 3b.2, 3b.4



79

c) Proportional reasoning, direct and inverse proportion, proportional change and exponential growth

1a.2, 1a.3 2a.2 2b.1 3a.3 3b.2

e) Linear, quadratic and other expressions and equations

1a.1

3.3 Statistics a) The handling data cycle

2a.3 2b.3, 2b.4

Economy & Finance

Level 2 Qualification in Personal Finance