Getting ready to study

Financial Studies BLACKPOOL SIXTH

A big welcome from the Business and IT department

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Course Overview

Financial Studies is a qualification from the London Institute of Banking & Finance. After the first year you will gain a Certificate in Financial Studies (CeFS), which then becomes a Diploma (DipFS) upon completion of the second year.

The Certificate covers the core disciplines of the financial capability. You will be encouraged to become a responsible borrower and sensible saver, and to appreciate the need for financial planning throughout your life. It will help you develop the core skills of critical analysis and evaluation, verbal communication (through classroom discussion) and written communication.

The Diploma provides an in-depth exploration of the important concepts of financial capability and how to apply them in achieving longer-term financial stability. It extends the skills gained from the CeFS to include areas such as sustainability in the wider financial services system, and the long-term effect of debt. Assessment

This is a 100% exam-based qualification. It is very similar to studying an A-Level. The main difference being that you sit exams throughout the two years in January and May, as well as re-sits in March and June respectively.

Each unit is assessed using two exam papers:

● Multiple-choice paper (35 marks) ● Written paper with a range of questions (65 marks)

The written paper consists of two sections:

● Section A: Case study questions (40 marks) ● Section B: Non-case study questions (25 marks)

The case study is released weeks before the written exam which gives you plenty of time to prepare for the topics that are likely to be assessed.

Your final qualification at the end of two years – Diploma in Financial Studies – is based on the following weightings:

Year 1 – CeFS: 47.5% / Year 2 – DipFS: 52.5%

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Summary of Units

Year 1 – Certificate in Financial Studies (CeFS)

Unit 1 – Financial Capability in the Immediate and Short Term (FCIS)

This unit highlights the importance of financial capability in meeting immediate and short-term financial needs. It introduces students to the financial services industry by focusing on the interaction between money, personal finance and the financial services market place.

After successfully completing unit 1 you will:

● Gain an understanding of cash flow to meet immediate and short-term financial needs through balancing income against expenditure

● Gain an appreciation of the differentiation of financial products for savings and the key features of interest and charges on borrowing.

● Understand your key responsibilities in terms of earning, income tax, National Insurance and other personal financial considerations depending on the stage of your life cycle

● Gain an appreciation of why money is important through focusing on what money is; attitudes to it; and how it can affect life choices.

Unit 2 – Financial Capability in the Medium and Long Term (FCML)

This unit highlights the importance of planning for medium- and long-term financial needs, with particular reference to the importance of the need to budget for future aspirations and life events. It introduces students to the features of risks and reward in managing personal finances.

After successfully completing unit 2 you will:

● Be able to consider the changing priorities attached to needs, wants and aspirations as individuals progress through the personal life cycle and the role of financial services in assisting lifelong financial planning

● Gain an understanding of the personal approaches that individuals take towards risk and rewards and the impact of foreseen and unforeseen influences on financial budgeting.

● Understand the features of different types of financial services product, how to make informed choices about these financial services products, and when, where and how they can get financial help and advice whilst gaining an appreciation of the differentiation of financial products for investment and borrowing, and the charges attached to them.

● Gain insight into Islamic banking and will also consider the validity of data and information as a means of assisting in the financial decision-making process.

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Year 2 – Diploma in Financial Studies (DipFS)

Unit 3 – Sustainability of an Individual’s Finances (SIF)

This unit highlights the importance of financial sustainability for the individual, to enable the development of skills to make sure that an individual’s financial capability is sustained over a period of time, taking into consideration the personal and external factors that lead to change.

After successfully completing unit 3 you will:

● Understand the key external financial factors that influence financial performance and the impact that this has on them as a consumer.

● Understand the importance of and be able to monitor budgets, and adapt financial plans to meet changing circumstances in order to maintain financial sustainability and avoid-long term debt.

● Gain an understanding of debt and borrowing alongside the impact of global events, developments and ethical considerations that impact on the financial services industry and the consumer.

Unit 4 – Sustainability of the Financial Services System (SFS)

This unit explores the financial services system and looks at how financial services providers work and compete with one another, their priorities and responses to external influences in maintaining financial sustainability.

After successfully completing unit 4 you will:

● Gain an understanding of the importance of financial sustainability for financial services providers and systems.

● Be able to analyse the impact of marketing techniques employed by financial services providers and the impact of changes in the financial services market and the effect this has on consumers.

● Gain an understanding of how financial services providers use marketing methods and segmentation, and approaches to attract, retain and satisfy their customers.

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Skills developed in Financial Studies

Throughout the course you will make practise and refine a range of skills, including:

● Financial literacy – this is truly a practical course that will teach you the life-long skill of managing your own money, today and in the future, as well being able to advise others on their finances!

● Internet research – being discerning and selective; https://support.google.com/websearch/answer/134479?hl=en

● Word processing using Google Docs – some of your work will be typed-up

● Presentations – some class activities involve group presentations, particularly in the second year

● Email using Gmail – using this in a professional manner to liaise with staff

● Working on the ‘CLOUD’ - using the Google Suite of Apps including Google Drive, Classroom etc.

● Teamwork – a lot of class activities involve working together in pairs and small groups

● Independence – regular work will be set for you to complete outside of the classroom

● Organisation – this is a two year course so you will have a lot of notes to make and revise from

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Recommended Resources

Course Textbook

You will receive your own copy – for free! – about one month after starting the course:

Websites

● The London Institute of Banking & Finance: www.libf.ac.uk/study

● Martin Lewis, ‘Money-Saving Expert’: www.moneysavingexpert.com

● The Bank of England: www.bankofengland.co.uk

● BBC Money: www.bbc.co.uk/news/business/your_money

TV Programmes

● CAN'T PAY? WE'LL TAKE IT AWAY! – real-life examples of the serious consequences of getting into debt: www.channel5.com/show/cant-pay-well-take-it-away

● The Martin Lewis Money Show Live – the ‘Money-saving Expert’ on TV: www.itv.com/hub/the-martin-lewis-money-show-live/7a0222

● Panorama – Universal Credit: One Year On: www.bbc.co.uk/programmes/m000by8m

● Universal Credit: Inside the Welfare State (3 parts): www.bbc.co.uk/iplayer/episode/m000f1xd/universal-credit-inside-the-welfare-state-series-1-episode-1

Radio Programmes

● Money Box: www.bbc.co.uk/programmes/b006qjnv

● MONEY 101: www.bbc.co.uk/programmes/p07y8rnk

● Your Money and Your Life: www.bbc.co.uk/programmes/b07mzr2w

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Preparatory Activities for September

Activity 1 – Understanding the value of studying personal finance

In September you will complete a diagnostic assessment which includes a literacy task. To help you prepare we would like you to read the article below and create your own summary notes focusing on:

● What are the key facts, statistics etc? ● What sort of arguments are presented – for and against? ● Which side seems to be favoured – why?

These notes can be written, typed, bullet points, spider diagrams; whatever helps you best in summarising the article. You need to aim for at least 1 page of A4 notes.

www.theguardian.com/money/2017/nov/11/schools-ignore-personal-finance-lessons-fail-generation-debt

Schools ignore personal finance lessons and fail Generation Debt

A study reveals a ticking time bomb of soaring debt

among teenagers. But learning how to handle cash

has stalled.

Young people are under intense pressure to take out store

cards and rack up debt to buy gadgets and appear rich,

according to teachers who took part in an in-depth study into

what youngsters understand about finance.

The study, The Ticking Time Bomb of Generation Debt, also found that education about money

has stalled, with many secondary schools side-stepping changes introduced to the national

curriculum in 2014. It was commissioned by Young Money, formerly the Personal Finance

Education Group.

Teachers said they were particularly concerned about young people finding themselves in high

levels of debt “made worse by extortionate interest rates”. It cited pressure from celebrities,

reality television and social media. One teacher told researchers: “The pressure to get into debt

is horrendous: in a capitalist society corporations spend billions advertising their products, while

the media portrays being rich as being cool.”

Another cited television programmes such as MTV Cribs, which features tours of the mansions

of celebrities, and My Super Sweet 16, about teens who “expect and will only accept the

absolute best”, as well as social media sites such as Facebook. The study found:

● Students were opening store cards and building up significant debt at a high level of

interest.

● A sharp increase in the number of older students targeted for store cards, new mobile

phone tariffs and download charges.

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● Tailored marketing to attract younger consumers and encourage them to spend more.

● Accusations that young people are not fully educated on “complex and potentially

damaging financial products”.

The report was issued on the same day that the Financial Conduct Authority published its Future

Approach to Consumers, which warned that companies need to do more to protect the

vulnerable, and that many people do not make economically rational decisions on their

finances.

“Many young consumers have never experienced anything other than near-zero interest rates.

With student loan debt and the relative ease of accessing credit, many may come to see high

levels of debt as the norm,” the FCA says.

In September 2014, financial education was made a component within the “citizenship” element

of the national curriculum at key stage 3 and 4. At the time, the government said its aim was “to

enable students to manage their money on a day-to-day basis, and plan for future financial

needs”.

But Russell Winnard, a former teacher who is now head of programmes and services at Young

Money, says the number of schools teaching pupils about money has stayed worryingly low.

“It is compulsory in every secondary school, though that does not apply to academies and free

schools. Around 35%-45% of schools were actually delivering financial education in 2014. Two

years on and we estimate it’s still only 40% doing so.”

Why are schools ignoring the curriculum requirements? Winnard says it may, in part, be down

to the under-confidence of teachers. “The mandate to teach personal finance education hasn’t

really worked. We need teachers to be more comfortable and confident enough to deliver high

quality financial education. There is a need for much more training for teachers.”

But is personal finance a huge turn-off for young adults, and squeezing precious time off the

curriculum that could be devoted to other matters? Not so, according to Hannah McWattie,

head of maths at Samuel Ward Academy in Haverhill, Suffolk, which is aiming to be a centre of

excellence in personal finance education. “We were doing elements of finance in maths and in

citizenship. But it was the 15- to 16-year-olds who said they wanted more information about

loans, mortgages, interest rates and credit cards. Some teachers may be reluctant to tackle the

subject because it is personal and emotive, and we always steer clear of personal circumstances.

Most students find the terminology of finance very confusing. They don’t, for example,

understand the difference between a credit card and a debit card, and why should they?”

At The Priory Academy in Lincoln, maths teacher Jim Hardy is working on increasing the level of

personal finance education, particularly in the school’s sixth form, after feedback from ex-pupils

now at university suggested that a huge number wish they had left school with more financial

awareness.

“Student engagement has been fantastic,” says Hardy. “This week, for example, students

showed genuine interest in working out take-home salaries, having first to calculate a range of

deductibles. Many were amazed at the amount of tax a millionaire has to pay! I left school

having had little financial education, but things have changed a great deal. University fees are

much higher, mortgage repayments or rent all demand a larger percentage of monthly wages,

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there is little interest gained for those with savings, and so it would appear prudent to educate

all young people in personal finance.”

Young Money receives financing from a variety of sources including Barclays, HSBC and JP

Morgan. So is there a risk that pupils are being tutored into taking an approach to money that

endorses the world-view of the banks? “It is certainly not about individual financial products.

It’s all about improving understanding so young adults are in a better position to make choices,”

says Winnard.

Often, it is those from middle-income homes that have a worse understanding about money.

“Disadvantaged households see cash physically, and have a better fundamental understanding

about its value, what it’s used for and where it comes from. In more affluent homes, children

see money less. The concept of value, and where the money comes from, is less clear,” Winnard

says.

One teacher told the study that parents, too, have poor money skills. “Unfortunately, I suspect

many are in debt and don’t necessarily have the skills to help young people avoid the same

mistakes. External support for both parents and young people is necessary to break this cycle.”

Activity 2 – Financial planning for a teenager during lockdown

Please read the case study below and answer the questions:

Alfie is busier because of Lockdown!

Alfie is 16 and currently studying at the local sixth form college. Due to the recent lockdown

college is closed and so he is studying from home. Alfie is finding this difficult as he works at the

local supermarket and therefore classed as a key-worker. One of the consequences of lockdown

is that the supermarket has been much busier and he is being asked to do a lot more hours.

Before lockdown, Alfie only worked 8 hours per week, stacking shelves and serving customers.

His shifts were all at the weekend and he earned the minimum wage of £4.55 per hour. He used

this money to cover his expenses and go out with his friends. His parents charge him £20 per

week as a contribution to their household bills.

Currently, Alfie is working 30 hours per week and extra shifts are always on offer. Alfie has

noticed that he is much better off financially, although he is finding the extra hours tiring. He is

also disappointed that he cannot use the extra money to socialise with his friends due to the

current social distancing rules.

His parents have also noticed the extra hours he is doing and are talking about increasing his

board as they have both been furloughed and experienced a fall in their income. Alfie is

wondering whether he might be better off working full-time at the supermarket and how long

the extra hours and demand for staff will last.

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Questions

1) From a financial perspective, what are the benefits and drawbacks for Alfie of deciding to go back to college in September and finish his education?

Benefits Drawbacks

2) From a financial perspective, what are the benefits and drawbacks for Alfie of deciding to work at the supermarket full time?

Benefits Drawbacks

3) Calculate the difference in Alfie’s income before and during the lockdown:

4) State 4 ways that Alfie may choose to use the extra income he is earning?

i)

ii)

iii)

iv)

Briefly explain which one is likely to be of most benefit to Alfie?

Briefly explain which one is likely to be of least benefit to Alfie?

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Further reading:

www.gov.uk/national-minimum-wage-rates

www.itv.com/news/2020-03-20/lidl-creates-2-500-four-week-store-jobs-to-cope-with-outbreak/

www.telegraph.co.uk/business/2020/04/27/tesco-starts-laying-army-temporary-workers/

Extension Activity – Financial planning for a mature adult during lockdown

We hope you would like to challenge yourself further by having a go at this extension task. Please read the case study below and answer the questions:

Lauren is worried about having enough money during the lockdown Lauren is 28 and works part-time at local hairdressers. Because of the lockdown and social

distancing rules she has been furloughed by her employer. Under the government scheme, she

will receive 80% of her normal wage. Given that she was just about able to make ends meet

before this crisis she is worried that financially this could tip her over the edge.

Before lockdown, she worked 16 hours per week and earned £15 per hour. Below is Lauren’s

pre-lockdown budget listing her income and all her expenses. Her little boy Dylon, who is 4,

would normally require childcare when she works. For one of the days he would be looked

after by Grandma. For the other two days he would be in a nursery which charges fees.

Given the current restrictions Grandma is unable to look after Dylon.

Lauren’s monthly budget BEFORE the lockdown:

Income £

Wages 960

Benefits 100

Expenditure

Rent 400

Food 200

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Utilities 80

Childcare 300

Balance ?

Questions

1) Calculate Lauren’s monthly budget balance – i.e. how much is she left with after deducting expenditure from her income?

Income tax is paid on any earnings from your wages or salary above £12,500 per year, which is known as your ‘personal allowance’.

2) Is Lauren expected to pay income tax?

3) Prepare a new budget below for Lauren based on the rules of the furlough scheme – remember to consider her childcare:

Lauren’s monthly budget AFTER the lockdown:

Income £

Wages

Benefits

Expenditure

Rent

Food

Utilities

Childcare

Balance

4) Is she right to be worried – why?

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5) What assumptions did you make when preparing the revised budget?

6) Read the following article about the government extending the furlough scheme until October 2020.

www.bbc.co.uk/news/business-52853333

What are the benefits and drawbacks for Lauren of this extension to the scheme?

Benefits Drawbacks

Further reading:

www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past

We hope you enjoyed the challenge!

See you soon…

www.blackpoolsixth.ac.uk/

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