WHAT DO YOU KNOW?

If someone is struggling financially,

what options do they have?

Write your ideas on your whiteboard

 B4
INFORMATI
ON
GUIDANCE
AND ADVICE
Do you use price comparison sites?

How trustworthy are they?

INFORMATION GUIDANCE AND

ADVICE
 INFORMATION GUIDANCE AND ADVICE

 In this topic you will learn about

 Function, role and responsibilities, advantages and
disadvantages of:
 Citizens Advice
 Independent financial advisor (IFA)
 Price comparison websites
 Money advice service
 Debt counsellors
 Individual Voluntary Arrangements (IVAs)
 Bankruptcy
 CITIZENS ADVICE

 An organisation that offers free and impartial advice to

individuals on legal, financial, consumer and other problems
 Run by charities
 Offers a large amount of generic advice through the website
plus individual advice face to face, email or phone
Citizens Advice.
 Mission statement

“We aim to provide the advice people need for the problems
they face and improve the policies and practices that affect
people's lives”

Citizens advice: debt

and money. What is the role of volunteers at the CA?

Complete Function, role and responsibility in booklet

 INDEPENDENT FINANCIAL ADVISOR
(IFA)

 Professionals who offer advice on a wide range of

financial services e.g. mortgages, pensions and
savings
 Can advise on products from a wide range of
providers i.e. they are not tied to one financial
Advice from
Moneysavingexpert.com
provider
on choosing an
independent financial  The IFA may however charge for their services
advisor.
 Individuals may have a personal IFA who they work
with over a long period of time trusting them with
many aspects of their personal financial management

Complete Function, role and responsibility in booklet

 OTHER SOURCES

 Price comparison websites

 Free information available on the internet to compare prices
from a range of organisations offering the same or similar
products e.g. car insurance, currency exchange, mortgages
The Money Advice
Service.  Would you take advice from a meerkat?
https://www.comparethemarket.com/

 Money advice service (MAS)

 Government organisation with a remit to help individuals
manage and plan their finances
Budget 2016: Money
Advice Service to be  Free and impartial advice
abolished. WHY?
 To be abolished and replaced by a smaller organisation

Complete Function, role and responsibility in booklet

 OTHER SOURCES

 Debt counsellors
 An individual e.g. an IFA or organisation who works to
help advise individuals on how to avoid and manage
debt
 Advice on how to reduce payments
 Can be charitable organisations helping to reduce debt –
view the work of The Debt Counsellors
Should there be one http://thedebtcounsellors.org.uk/about/
body to advise on
pensions and debt?  Can also offer help with IVAs and bankruptcy (see next slide)

Complete Function, role and responsibility in booklet

 OTHER SOURCES

 Individual Voluntary Arrangements (IVAs)

 A Government organisation that allows individuals to work with an
insolvency partner to manage their debt
 The individual:
IVAs: Gov.uk  Formal agreement between the debtor and creditors that is legally binding. 
 Agrees to make a regular repayment of a pre agreed amount to an insolvency
practioner
 The insolvency practioner shares this out amongst all of the individual’s
creditors
 All or some of the debt will be repaid

 Bankruptcy
Bankruptcy: Gov.uk
 When an individual is forced into bankruptcy because they are unable to
repay their debts
 Should be seen as a last resort as the consequences can be severe and
long lasting
Complete Function, role and responsibility in booklet
 COMPLETE THE
ADVANTAGES AND DISADVANTAGES
Source Function Role and Advantages Disadvantages
responsibility
Citizen advice

IFA

Price comparison
websites
MAS

Debt counsellors

IVAs

Bankruptcy

Write your ideas on your whiteboard

 ADVANTAGES AND DISADVANTAGES

Source Advantages Disadvantages

Citizen advice Free Volunteers are not necessarily

Face to face, online and professionals in financial issues
telephone
IFA Advice is offered by Services will be charged for
professionals Advice is not guaranteed to be 100%
Regulated by the FCA and FOS up to date or unbiased
Price comparison Easy to access 24/7 Do not always cover all of the
websites Free service available options
Potential for bias

MAS Government funded = free! Advice is only available online

Wide range of financial Advice is generic
matters

Complete the table in your booklet

 ADVANTAGES AND DISADVANTAGES

Source Advantages Disadvantages

Debt counsellors Advice is offered by a Services will be charged for

professional who specialises in Advice will focus just on debt
debt management  management
Regulated by FCA and FOS
IVAs  Helps manage debt repayment Set up handling fees are charged
with regular payments  Will affect future credit ratings. 
Independent advice, without
bias
Bankruptcy 12 months Job and housing stigma 
Immediate impact on credit score
May have to sell personal assets

Complete the table in your booklet

 2 MINUTE CHALLENGE
(AGAIN!)

What do the following stand for?

• FCA
• BACS
• FSCS
• OFT
• CHAPS
• ISA
• FOS

* Can you write down one 'thing' about each one??

 ANSWERS

What do the following stand for?

• FCA – Financial Conduct Authority
• BACS – Banker's Automated Clearing Service
• FSCS – Financial Services Compensation Scheme
• OFT – Office of Fair Trading
• CHAPS – Clearing Housed Automate Payment Systems
• ISA – Individual Savings Accounts
• FOS – Financial Ombudsmen Service
 EXAM QUESTION

Simple recall 
No explanation
required
MARK SCHEME
 INFORMATION GUIDANCE AND ADVICE

 In this topic you have learnt about

 Function, role and responsibilities, advantages and
disadvantages of:
 Citizens Advice
 Independent financial advisor (IFA)
 Price comparison websites
 Money advice service
 Debt counsellors
 Individual Voluntary Arrangements (IVAs)
 Bankruptcy
 LEARNING AIM B
EXAM QUESTIONS

6 Mark question 

Household debt is at its highest level in a decade. Many families are struggling to pay
back money they have borrowed. Shekemi has recently taken out a loan for a new car
but is worried that she might not be able to keep up the repayments. 

Discuss why it is important for Shekemi to avoid getting into unmanageable debt. 

Planning:

Two to three paragraphs 

No conclusion required
 A PLAN

Choose one of the points below and write a plan

(TMT and AAR) on your whiteboard. 

- Could give her a bad credit rating 

- Interest and bank charges on the loan could be

expensive
 A COMPLETED PLAN

- Could give her a bad credit rating

TMT – more difficult to borrow money in the future

AAR – choice of products and spending may be limited

- Interest & bank charges on the loan could be expensive

TMT – could cause her more stress and worries as she doesn't
know how she can repay

AAR – social impact such as mental health issues and/or break

up.
 LEARNING AIM B
EXAM QUESTIONS
12 Mark question 

Daniel is married with a young family. He is a homeowner with a mortgage and has
two personal loans and outstanding balances on three credit cards.  One of the
personal loans is secured on his house. His personal circumstances have changed
since he took on these debts. 

He now earns significantly less than he did and he can no longer afford the debt
repayments.  As a result, he is in arrears on all of his debts.  He has been served with
default notices demanding repayment in full.  Daniel has been advised to either apply
for IVA (Individual Voluntary Arrangement) or to apply for bankruptcy. 

Evaluate whether Daniel should apply for an IVA or apply for bankruptcy. 
 PLANNING YOUR
12 MARK QUESTION

Evaluate whether Daniel should apply for an IVA or

apply for bankruptcy. 

Planning:
What is meant by IVA and bankruptcy?
Advantage of IVA 
Advantage of bankruptcy 
Disadvantage of IVA 
Disadvantage of bankruptcy 
Conclusion – which should Daniel apply for and why.
 A PLAN

Choose one point below and write a plan (TMT and AAR)
on your whiteboard. 

- Advantage of IVA = Debts are frozen 

- Disadvantage of IVA = High costs in setting up

- Advantage of bankruptcy = Quickest way to become debt

free

- Disadvantage of bankruptcy = Could lose all personal

assets. 
 A PLAN

Evaluation.. Which method are you going to choose

any why? 

Overall, I believe...

Because...
 A COMPLETED PLAN -
IVA

Adv = Debts are frozen 

TMT = no added interest to the amount that needs to be

repaid 

AAR = After the period of the IVA (5-6 years), Daniel will
know he is debt free. 

Disadv = High costs in setting up 

TMT = Daniel will need to pay to enter an IVA as he is

already in arrears he is unlikely to be able to afford the cost

AAR = IVA may not be a feasible option for Daniel 

 A COMPLETED PLAN -
BANKRUPTCY

Adv = quickest way to become debt free

TMT = Possible to be discharged from bankruptcy after 12

months 

AAR = He will no longer be in arrears with his CC or personal

loans

Disadv = could lose his assets 

TMT = Daniel may lose his house in order to repay and declare
himself bankrupt 

AAR = Daniel his partner and children will have no home to live
in
 A COMPLETED PLAN -
EVALUATION

Overall, I believe that Daniel should apply for an IVA

because he is likely to be able to keep all of his assets
once the IVA is over, unlike if he becomes bankrupt,
meaning Daniel and his family will have somewhere
to live.