Topic 1 – Needs, wants and aspirations

Affordability

An important concept in helping people to choose financial products, based on budgeting and
forecasting to help individuals decide what they can afford to spend

Aspirations

Things or experience that people would like to have on the future, for example having a luxury
holiday

Attitudes

People's thoughts and feelings at a given time and place, whether it be about another person, an
event or an issue

Beliefs

Specific and detailed personal convictions about how things are. They can be religious.

Capital

The money or other assets owned by an individual or a business. It refers to he funds provided by the
shareholders, not deposits from customers

Consumer Credit

A term used for borrowing.'Taking credit' or 'buying on credit' refers to borrowing. However, a credit
into a bank account means paying money in.

Credit Card

A card that allows the holder to make face to face purchases as well as online or over the phone and
to withdraw cash from an ATM. The card repays the amount owed to the provider either in one
payment or in instalments. The provider charges interest on cash withdrawals from the time the
withdrawal is made and on purchases after a certain period.

Culture

A society's set of norms about behaviour and attitudes across social groups. It indicates what society
considers to be acceptable and unacceptable

Deposit

A sum of money placed by a customer with a financial services provider

Distribution Channel

The medium through which information is transferred to its intended recipient, eg email, telephone.
It refers to the ways a customer can contact their provider and manage their account. As known as
communication channel.

Ethical Investing
When someone chooses to save in a way that means the money will be used for what that individual
considers to be good purposes. Ethics are a set of ideas about what people believe is morally right

Feedback Effect

Thoughts and feelings that have a direct influence on behaviour. As expectations can be self-fulfilling,
people's own attitudes affect the outcome of events

Hire Purchase

A type of secured consumer credit to finance items such as cars and furniture, which involves the
borrower repaying over a number of years

Investments

Money paid into financial products; the aim is that the value of the product will grow over time and
so the person will eventually receive back more money than they paid in. Investments are a way of
saving over the medium or long term

Life assurance

A type of insurance policy that pays out a sum of money if the insured person dies

Life cycle

The stages through which people pass between birth and death, including childhood, teenage years,
young adult, mature adult and old age. Not everyone passes through all stages and not everyone
passes through the stages at the same age

Marketing

Advertising, selling and delivering products to customers. Everything a company does to acquire
customers and maintain a relationship with them, including promotion and public relations (PR)

Mortgage

A loan taken out to pay for a property, usually over a long term such as 25 years

Needs

Things that people need to survive, such as food, basic clothing and a place to live

Peers

Our equals - people in the same position as us, for instance of the same age

Pension

An income that people receive after retiring from work. In the UK people receive a pension from the
state; some people also receive pension payments from schemes run by their former employers or
arrangements that they have made for themselves

Personal Loans

A product that allows someone to borrow a fixed amount over a fixed amount of interest
Product Placement

An aspect of public relations involving a product appearing on a TV show or in a film

Promotion

Paid-for marketing activities, including advertising. It includes all activities that aim to: communicate
with people; inform them of goods and services; and persuade them to buy

Public Relations (PR)

A specific part of promotion known as 'below the line' expenditure. It is advertising that is not paid
for directly but which keeps a business's product in the public eye. It is the part of promotion in
which the entire message is implicit.

Repossession

A legal process whereby a financial institution takes ownership of an asset, often a house, because
loan repayments relating to that asset have not been met. Repossession is the last resort in the
process of recovering money owed.

Risk tolerant

Willing to take risks.

Secured loan

A loan secured against an asset, such as a house. If the borrower does not keep up repayments on
the loan, the lender can seize the asset and sell it to recover the money owed

Sponsorship

An aspect of public relations involving a business paying for a sporting or entertainment event or
venue name

Values

General feelings about desirable behaviour and goals, ie involving concepts of 'good' and 'bad' and of
how people think things ought to be

Wants

Things that people would like to have but can survive without, such as entertainment, fashionable
clothes