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A Practical Guide to

Financial Education within Citizenship

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A Practical Guide to Financial Education within Citizenship

Contents

Introduction and context

What is financial education, and financial capability?

Developing a coherent approach to financial education

Citizenship

PSHE education

Mathematics

Practical approaches

Practical activities

Societal issue 1: Is pay fair? Why is there such a large gap between high

earners and low earners?

Personal issue 1: How much will I earn?

Suggested activities

Societal issue 2: How is public money raised and spent?

Personal issue 2: What is on my payslip?


Societal issue 3: Should payday lenders be outlawed, strictly controlled or

allowed to operate freely?

Personal issue 3: Can I afford to move into a flat share?


Societal issue 4: Should everybody have the right to a bank account?

Personal issue 4: Should I open a bank account?


Societal issue 5: Consumer rights – are most of us in the dark?

Personal issue 5: Can I return the jeans I bought in a sale?


Societal Issue 6: Is globalisation a force for good or evil?

Personal issue 6: Should I consider more than price when I buy a product?


Resource sheets

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4 –

5 –

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Introduction and context

Welcome to this guide, developed by pfeg in partnership with CISI and the Citizenship community. The guide, and resources included, aim to:

• the functions and uses of money, the importance

and practice of budgeting, and managing risk (Key

Stage 3);

• income and expenditure, credit and debt,

insurance, savings and pensions, financial products

and services, and how public money is raised and

spent (Key Stage 4).

As schools plan an effective programme of financial

education in light of the new National Curriculum for

England, and consider what pupils need to know, they

will develop and flesh out the detail of the key stage

specifications. This will present opportunities to teach

financial capability in different areas of the curriculum.

There is another aspect to the addition of financial

education in Citizenship. Financial exclusion is a huge

issue in some of the communities from which students

are drawn. They may receive limited information

and guidance from parents and carers about how

to manage money competently. This can mean that

they become marginalised and may find it difficult to

participate in mainstream society, thereby threatening

their future life chances and certainly affecting their

ability to become active citizens in their communities.

• help teachers understand the connections between

Citizenship and financial education;

• bring together the ‘personal’ and ‘public’ aspects of

financial education;

• help schools develop a coherent approach to the

delivery of financial education through Citizenship

and other curriculum subjects;

• provide practical ideas and activities for teaching

financial education within Citizenship.

One of the main aims of Citizenship education is

to enable individuals to play a full and active part

in society. Financial and economic understanding

leading to increased financial capability is an

important part of achieving this aim. Many of the key

decisions in life – at personal, school, community,

national and international level – involve financial

considerations, whether this is to do with the allocation

of scarce resources, establishing priorities or sticking to

tight budgets. A sound grasp of how the economy and

financial markets work, allied with an understanding of

our economic and financial rights and responsibilities,

helps to lay the foundations for more informed

participation and effective decision making.

In England, the 2014 National Curriculum includes

a specific provision for financial education within

Citizenship. It states that a high quality Citizenship

education should:

• prepare pupils to take their place in society as

responsible citizens, manage their money well and

make sound financial decisions;

• equip them with the skills to enable them to

manage their money on a day-to-day basis, and

plan for future financial needs.

More specifically in respect of key stages 3 and 4, it

states that all pupils should be taught about:




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They also need to understand the wider economic

context in which financial decisions are made, and

how personal finance and public policy can be

influenced by the UK and global economy. This

includes aspects of finance such as changes in

interest rates (who sets them and why), recession,

financial exclusion, how taxation is decided, how

pensions are arranged, wage levels (the National

Minimum Wage), gender differences in pay, the

way the energy market works, and the decisions

made by local and central Government and financial

institutions. All of these impact on people’s lives

and the financial decisions they make, and should

be taken into account in order to manage money

effectively. To be financially capable, you need a

wider financial understanding.

Financial education in schools is a planned

programme of learning opportunities and experiences

designed to increase the financial capability of

young people from every social and cultural

background. Being financially capable means having

the confidence, skills and knowledge we need to

manage our money well, now and in the future. The

development of financial capability is lifelong and

includes the ability to adapt our approach to money

management in response to changes in our financial

circumstances and the wider economic environment.

Young people need to know how financial products

work and acquire the knowledge and understanding

to make sound financial decisions. This means that

they should have a working knowledge of financial

products such as bank accounts, credit cards, loans,

shares and savings. They also need to acquire the

skills involved in handling money competently i.e.

when budgeting, assessing risk, spending responsibly

and so on. This will help them manage money on a

day-to-day basis, avoid falling into debt and negotiate

the increasingly complex world of electronic finance

and e-commerce.

What is financialeducation, and financialcapability?




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Developing a coherentapproach to financialeducation

Consulting students can be a fruitful way of deciding

what aspects of financial education to teach. You can

carry out an audit of what they already know as well

as what they would like to learn about, this aspect

of pupil voice fits in well with the aims of Citizenship

education. pfeg has a number of case studies which

show how this can be done and the financial criteria

or topics that could be used in the consultation – see

www.pfeg.org/resources.

Financial education may take place in a number of

ways including:

• within timetabled subjects, most notably

Citizenship, PSHEe and Mathematics; and PHSEe

and Mathematics;

• tutorial time which may occur once a week for 50

minutes or in short 10 - 20 minute periods;

• blocks of lessons on a carousel, e.g. a run of five

lessons over five weeks

• one-off events, e.g. My Money Week (www.pfeg.

org/MyMoneyWeek);

• special activity days where outside financial experts

play a role.

Schools and others responsible will have to decide

on how to devise a programme of financial education

to suit their circumstances and the needs and

interests of their students. However, the relationship

between three key subjects – Citizenship, PSHEe and

Mathematics – is particularly important. They can

provide a cohesive and complementary framework

to teach financial capability, understanding and

responsibility. For more help, advice and tools on

planning financial education see www.pfeg.org.

Although financial education has been introduced

in the Citizenship curriculum it may, of course, be

delivered through other subjects. Indeed, some

aspects of financial education may be taught more

appropriately elsewhere, e.g. calculating interest

rates in mathematics (where it also has a statutory

home), or the relationship between personal money

management and wellbeing in PHSE education.

However, it is essential that there is a coherent and

planned programme of financial education across all

subjects, and schools should map out clearly where

elements of financial capability are being taught.

Moreover, these elements should be addressed

directly and explicitly in lessons with learning

outcomes clearly stated. Research has shown that

financial education is most effective when it is taught

within standalone lessons or as a distinct component

of a lesson.

To support the planning, teaching and progression

of financial education within schools, pfeg has

developed two frameworks – see www.pfeg.org/

PlanningFrameworks. These frameworks have been

designed to help teachers deliver financial education

flexibly across the range of subjects and learning

opportunities available within the school curriculum.

The frameworks can be used in a number of ways, for

example to:

• gauge students’ starting points for financial

education;

• identify learning outcomes for lessons and schemes

of work;

• map existing provision and identify gaps;

• plan for progression between ages and key stages.




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The new Citizenship curriculum also provides

scope to examine some of the more personal

aspects of financial decision making and to address

how the choices we have and decisions we make

about money are inextricably linked to, and

informed by, wider public policy and legislation.

The contribution of Citizenship to financial

education is explained well in a joint statement

from pfeg, the Association for Citizenship

Teaching and the PSHE Association:

‘Although the [Citizenship] Programme of

Study at Key Stage 3 places an emphasis on the

personal aspects of financial decision-making, the

Key Stage 4 Programme of Study indicates that

this can only be fully interpreted in Citizenship

through a recognition that individuals make

these decisions in a wider public policy context.

It is this that provides the distinctive Citizenship

perspective on personal finance – acknowledging

the importance of collective decisions, providing

opportunities to explore public interest issues

relating to money and making links between

private matters and our role as public citizens.’

Citizenship

The introduction of financial education into

Citizenship at KS3 and KS4 has raised questions

about the relationship of the personal aspects of

financial capability to the more public arena of

Citizenship education. Matters have often been

defined as Citizenship when they move from the

personal to the public sphere, that is, matters

of public interest and public concern where

participation and action are required. The aim of a

good Citizenship education is to develop informed,

active and critical citizens who will engage in,

and contribute positively, to society at large.

There is no debate over the relevance and

importance of finance in Citizenship. Important

decisions on public projects often depend on the

amount of money available and the perceived benefit

to citizens. Decisions about taxation and Government

spending, particularly in relation to cuts in spending

and issues around welfare and benefits, affect all

of us. Young people need to be able to join in the

debate on these areas armed with the knowledge and

skills to allow them to participate with confidence.

Topical controversies about finance issues, e.g.

bankers’ bonuses or payday lenders, usually

generate a good response from students and

develop interest in learning about financial matters

such as how banks work, debt, the dangers of

borrowing, why we pay taxes, why some jobs

get much less money than others and so on.

This is not only a good way to access financial

education but also to help students become better

informed citizens able to engage in these crucial

discussions linked to their personal wellbeing as

well as the wellbeing of their fellow citizens.

Developing a coherentapproach to financialeducation continued…




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PSHE education

Financial education is an important aspect of Personal,

Social, Health and Economic education and is already

incorporated into many PSHEe programmes. The

focus here is upon equipping students with the

knowledge, skills and understanding to manage

their money now and in the future through exploring

the personal, social and emotional aspects of

financial decision-making and responsibility. It is

this perspective that places financial knowledge and

skills in personal and family contexts, recognising

the impact money has on many important areas

of our lives including our relationships, our

physical and mental health and wellbeing, and

our plans for work or career development.

Mathematics

At its most basic level, managing money involves

calculations using numbers, and numeracy skills

underpin most of our interactions with money; without

them we cannot make informed financial decisions.

Money provides a real-world context and relevance

for mathematical tasks. For instance, understanding

the way ‘interest’ is calculated is central to managing

money (borrowing and saving) in the everyday world.

Students need to be able to work out the interest on

loans or savings to make sound decisions.

See Introducing Financial Mathematics, produced

by pfeg, for practical guidance, and activities in

respect of mathematics and financial capability.

www.pfeg.org/MathsGuidance&Resource




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Practical approaches

The second part of this guide offers some ideas for practical approaches and activities that teachers can use to deliver financial education in the context of Citizenship. We have identified two main lines of approach:

2. Personal issue led

Starting from the perspective of the individual and connecting matters of personal finance to public policy on money, as well as to public debate.

Beginning with an individual’s personal experience

may be less familiar to Citizenship teachers, but

there is a strong pedagogical case to be made for

starting from ‘where the person is at’ before moving

on to wider concerns and matters. Students often

find it easier to process information and understand

concepts that are rooted in their personal experience,

or that they have encountered in some form in their

daily lives.

If, for instance, you want students to understand

budgeting in local authorities or at national level,

in particular setting priorities and making decisions

about value, then starting at the personal level can

be a good way to help pupils understand what is

involved. Importantly, this approach also offers the

opportunity to cover some of the more personal

aspects of financial education that feature in the

Citizenship Programme of Study and to explore how

personal decisions about money are always made in

the wider context of public policy and debate.

1. Societal issue led

Using societal issues to engage with the public side of finance including the collection, and allocation of public funds and money-related matters of public interest.

Citizenship teachers will be familiar with an enquiry-

led approach to teaching. Topical issues to do with

the public side of finance are constantly in the news

and should engage students and encourage a lively

response. Some of these may touch the lives of

students, their families and the communities in which

they live, so of course sensitivity is required on the

part of the teacher.




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Practical activities

The following pages contain six pairs of societal and personal issues involving money that can be used to develop financial understanding and responsibility within Citizenship. Each pair first looks at a societal issue and how it could be investigated using different financial topics and themes. This is followed by a personal issue in the form of a question which, through the use of a flow diagram, is ‘unpacked’ and connected back to the societal issue. The intention here is to highlight how personal questions about money can be used to explore public aspects of finance. Each flow diagram also links to a number of activity suggestions, some of which have accompanying resource sheets which can be found at the back of the pack.

It may also be helpful to use other pfeg or Quality

Mark resources to teach various aspects of the

financial topics below. See www.pfeg.org/resources

or use pfeg’s ASKpfeg service www.pfeg.org/

ASKpfeg which can help you identify resources

to teach any financial topic, or provide advice on

planning and teaching financial education.

Another useful resource for young people is

#yourmoney, a publication supported by CISI and

available from www.cisi.org/bookmark/genericform.

aspx?form=29848780&URL=yourmoney




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Is pay fair? Why is there such a large gap between high earners and low earners?

This issue is at the heart of a fair and just society and can be investigated in a number of ways.

• Look at the levels of pay across different jobs.

• Consider the type of work done in these jobs and

discuss with students whether the pay awarded is fair.

• Consider the reasons why some people might be

paid much more than others.

• Explore whether equal pay for men and women

exists in the UK.

• Investigate the National Minimum Wage and the

Living Wage.

• Consider whether bankers should get such large

bonuses.

• Look at measures by which the Government could

bring more equality to the system of pay awards, for

example more taxation on large amounts of income,

and the potential pros and cons of such action.

Societal issue 1

How much you are paid for the job you do is influenced by a number of factors. Office cleaners, ambulance drivers,

teachers, and barristers each play a valuable role in society but they are not rewarded equally. Jobs that require high

levels of skill, education or responsibility often pay more than those that require lower levels of skill, training and

responsibility. But it is not always the case, for example the boss of a major company can earn more in three days than a

nurse does in a year, yet both jobs involve significant levels of skill and responsibility. Many question whether the large

pay gap between high and low earners is fair and debate the Government’s role in encouraging greater equality of pay,

and in ensuring that low paid workers earn a Living Wage. Currently there is a National Minimum Wage for workers in

the UK that employers are legally obliged to pay.

How much will I earn?

Level of skill/qualification/pressure/responsibility

Gender inequality

Why do some people get paid more than others?

Is this fair?

Is money a motivating factor? Others might include job satisfaction and making a contribution to society

What type of job do I want and why?

Levels of income for different jobs

Should a Living Wage replace the National Minimum Wage?

Should bankers’ bonuses be capped?

How can the Government encourage greater equality of pay?

Is the level of gap between high earners and low earners fair?

Personal issue 1 Suggested activities

How much will I earn?

1

2

3

1 2 3




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1

2

A fair day’s work for a fair day’s pay?

Is there a gender pay gap in the UK?

Use the following questions to structure class

discussion:

• Does the level of pay always reflect the duties and

tasks required for a particular role?

• Are you surprised by some of the annual salary

amounts associated with particular job roles?

• Do you think some people are overpaid or

underpaid – is it fair?

• What other factors might influence levels of pay?

Reasons might include: discrimination in hiring,

differences in the jobs men typically go into as

opposed to women (occupational segregation),

discrimination in pay or salary negotiations,

differences in amount of work experience, and the

fact that women still bear the main responsibility for

looking after children. Extend the activity by asking

groups to come up with one more solutions to reduce

the gender pay gap.

Ask students to work in pairs to discuss the different

job roles listed in resource sheet 1, thinking about

the tasks carried out in each job, the skills, experience

and training required to do the job well, as well as the

level of responsibility involved.

Ask students to complete column A ‘your guess –

gross annual salary (£)’, using the selection of gross

salaries listed at the bottom of the resource sheet.

(Some of the actual gross salaries have been filled in

to give students a steer.)

Take feedback from the students as to why they

have allocated certain salaries to certain roles, before

revealing the actual average annual gross salary for

each job role in the UK in 2014/15.

Explain to the class that they are going to work in

groups to investigate the ‘gender pay gap’, (defined

as the difference between the average earning of men

and women in any given population) using the web

links below, or similar.

• http://www.equalpayportal.co.uk/where-to-

start-2/

• http://www.telegraph.co.uk/women/womens-

business/10513636/Gender-pay-gap-widens-with-

women-earning-an-average-of-5000-less-reports-

ONS.html

Ask each group to identify three possible reasons why,

on average, men may earn more per hour than women.




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3A fair day’s work for a fair day’s pay? The National Minimum Wage:

Keep it? Scrap it? Change it?

Is there a gender pay gap in the UK?

The legislation made it a criminal offence for

employers not to pay the National Minimum Wage to

employees. Rates are updated every October and are

dependent on age.

The National Minimum Wage Act 1998 came into

effect in the UK on 1st April 1999 to help those

affected by low pay, many of whom did not have

access to trade union representation.

Introduce the concept of the National Minimum Wage (NMW) and NMW rates using the information below:

Split the class into small groups. Ask half of the

groups to create a mind map highlighting the possible

advantages for employees, businesses and the

Government of having a NMW.

Ask the other groups to do the same but to highlight

the disadvantages, with all groups presenting their

points to the rest of the class.

Year 21 and over 18-20 Under 18 Apprentice1

From 1st October 2013 £6.31 £5.03 £3.72 £2.68

From 1st October 2014 £6.50 £5.13 £3.79 £2.73

Possible Benefits Drawbacks

• Greater equality – narrows the pay gap between

high and low paid workers;

• Lowers poverty;

• Workers are less likely to be exploited;

• Increased numbers in work;

• Greater amount of tax raised;

• Decrease in benefits paid out.

• Can cause inflation – higher wages means

increased costs are passed on to customers

through higher prices;

• The UK becomes less competitive – low wage

economies such as China and India are more

appealing for investment;

• Shadow markets form – employers use people

who are not entitled to work in the UK and pay

them less than the National Minimum Wage –

this means lost tax income for the Government;

• Those in poorer parts of society already claiming

benefits do not benefit from it.

Source: https://www.gov.uk/national-minimum-wage-rates

Use the web links below to facilitate a debate around whether the NMW should be replaced by with the Living Wage.

http://www.livingwage.org.uk/

BBC Newsnight report on the living wage (up to 4:25) – http://www.youtube.com/watch?v=-E7LZFAYlho.

1 This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year of an apprenticeship. All other

apprentices are entitled to the National Minimum Wage for their age.




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How is public moneyraised and spent?

This question can be addressed directly as it appears explicitly in the KS4 Programme of Study.

• Ask pupils what they know about tax and to list any

taxes they are aware of, and use their answers to

construct a list of taxes to which you can add.

• Divide these into direct and indirect taxes and

explain the difference – provide examples for

them to categorise, e.g. duty on cigarettes is an

indirect tax.

• Discuss the idea of progressive tax, e.g. income,

and ask them whether they think this fair. Look

at the different rates and discuss whether richer

people should be paying more. Ask them if

they think the starting point for tax should be

raised further.

• Ask them what they think taxes are spent on –

construct a class list and explain some of the areas,

e.g. welfare spending and benefits, education.

• Set up an activity to prioritise spending. Give

them areas of public spending, e.g. education and

defence. Tell them that cuts have to be made in

spending and they have to decide where the cuts

are going to fall and to justify these.

• The limited nature of public money can be used

to debate a range of issues of public interest, for

example ‘should tax payers be giving money to the

royal family?’, or ‘should treatment on the National

Health Service be rationed?’.

Societal issue 2

Your payslip contains lots of information about the income you earn. It shows your gross pay and your net pay; your gross

pay is what you earn before any deductions and your net pay is what you actually receive into your bank account once all

the deductions have been taken off. Deductions can include income tax, National Insurance, pension contributions and any

student loan repayments. The amount of income tax and National Insurance that you pay is dependent on how much

you earn – as earnings increase, so does the amount of tax and national insurance deducted. Tax and National Insurance

are used to pay for a range of public services such as healthcare, education, and the welfare system.

What is on my payslip?

Income tax National Insurance

How much will I have to pay?

Why do we pay income tax and National Insurance?

Public services (e.g. education, health, welfare)

Prioritisation of spending and ‘The Budget’

Workplace pension contribution

Automatic enrolment

Student loan repayments

What is the difference between gross and net pay?


What is on my payslip?

1

1

31

2

2

3

1 2 3



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1 Understanding your payslip

Focusing on the deductions area of the payslip,

explain that income tax and National Insurance are

deducted from your earnings before you get them.

Show students the four different annual incomes in

the table below. Ask them to guess what they think

the total deductions for income tax and National

Insurance would be for each one (students are not

expected to guess correctly, it’s more to get a sense

of how much they think is deducted).

To extend this activity, highlight that as earnings

increase so too does the proportion of tax deducted.

This is known as progressive taxation. Do students

think the idea of progressive tax is fair?

Introduce this activity by asking students how

individuals in work know whether they’ve been paid

the right amount of money. Answers may include the

fact that employers provide employees with a payslip

to show their earnings. Ask students what they

think would be included on a payslip and list these

suggestions on a flipchart or whiteboard.

Hand out resource sheet 2 and compare this to the

list made by the students. Discuss each of the terms –

have the students come across any of these before?

Reveal the correct answers. Were the students’

guesses higher or lower than the actual figures? Are

they surprised by the actual figures? You may wish

to introduce the concept of a personal allowance

(the amount you can earn in a year before tax is

deducted), and tax and National Insurance rates, and

that these change each year.

For details see http://www.hmrc.gov.uk/working/

intro/employed.htm

Annual Income Income Tax (2014-15 figures)

NI (2014-15 figures)

Total Amount paid in tax and NICs as % of annual income

£10,000 0 £245.28 £245.28 2.5%

£25,000 £3,000.00 £2,045.28 £5,045.28 20.2%

£50,000 £9,627.00 £4,231.78 £13,858.78 27.7%

£100,000 £29,627.00 £5,231.78 £34,858.78 34.9%




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Understanding your payslip 2 Spending cuts and the school budget

Develop this activity further by exploring how

the Government spends the money collected

from income tax and National Insurance. ‘Paying

for it’, a pfeg Quality Mark resource produced

by the Citizenship Foundation, includes

some excellent activities about Government

spending and the social and ethical dilemmas

involved in allocating limited funds – see www.

pfeg.org/resources/details/paying-it

Divide the class into six groups and give them each

are area of spending from the list. Ask each group

to prepare a five minute presentation on why their

area of the budget should be protected from cuts

as well as recommending one way to cut spending

in a different area. Explain that you will be acting

as the school budget holder and will make your

decisions based on the arguments presented.

You may wish to use the prompts below to

help students prepare their presentations:

• List three reasons why having money

budgeted for utilities (or another area

of the school budget) is important.

• What would be the consequences of a reduction

in funds for this area of the budget?

Once all groups have presented, summarise any

strong arguments for why certain areas of the school

budget should be protected as well as any convincing

arguments for why certain areas should be cut. Round

up by highlighting that schools, like the Government

and other organisations, face many competing

priorities for spending their limited budgets and

prioritising spending requires careful thought in

terms of the likely outcomes, and how these will

affect different groups within the community.

Hand out resource sheet 3. Tell students that the list contains various items of expenditure from the school

budget, all of which are required for the school to run effectively. Explain that due to the unforeseen cost of

school building work over the summer holidays, cuts need to be made to other areas of spending so that the

school does not exceed its budget for the year.




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3Will I have enough money when I’m older?

Students may find the final question, ‘Why is the

age of the State Pension increasing?’ challenging so

it is worth going over this detail. Explain that Britain

has an aging population i.e. people are living longer

and having fewer children, which means there

are proportionally fewer people of working (tax

paying) age to cover the rising costs of state welfare,

including a growing pensions bill. In order for the

State to be able to cover the cost of pensions people

will need to work for longer (and pay tax for longer)

and start receiving State Pension later in life.

This activity can be used as the basis of two sessions, the first on the State Pension and the second on workplace pensions.

a.

The State Pension

Start by asking students what sort of lifestyle they

would like in ten years time and how they might

achieve that. Someone is likely to answer ‘by having

a job’ or ‘by earning money’. Ask students to think

about their lifestyle in 60 years time. How might they

pay for basics such as food or heating, as well as

luxuries such as holidays when they are retired from

work? Someone might say ‘with savings’ or ‘with

a pension’.

Refer students to resource sheet 2 and specifically

to the National Insurance deduction. Explain that

throughout our working lives we pay National

Insurance (which is a tax on earning, deducted along

with income tax) to build up our entitlement to certain

state benefits, including the State Pension.

Hand out resource sheet 4 and, working in pairs,

ask students to complete the fact sheet, using the

following sources:

• www.gov.uk/state-pension/eligibility

• www.moneyadviceservice.org.uk/en/articles/

state-pensions

• www.telegraph.co.uk/finance/

personalfinance/10501607/State-pension-age-

rises-a-plan-to-retire-at-55-not-70.html




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(let students research what this is) would be

adding to their workplace pension per year if:

1. Both employee and employer pay in 1%

2. Employee pays in 4% and employer 3%

3. Employee pays in 3% and employer 6%

www.moneysavingexpert.com/savings/

discount-pensions#widget

Refer students to the pension deductions in

resource sheet 2. Explain that until recently

workers have been able to choose whether they

want to join their employer’s pension scheme, but

that a new law introduced in 2012 means that every

employer must automatically enrol workers into

a workplace pension scheme if they are over 22,

earn more that £10,000 and work in the UK. This

is called ‘automatic enrolment’. Under the current

system, an employee must contribute 0.8% of their

earnings to their workplace pension, an employer

must contribute 1% of an employee’s earnings,

and tax relief adds another 0.2%. This will rise to

4%, 3% and 1% respectively by 2018. Do students

think this automatic enrolment is a good idea?

What about the rates for employee / employer

contribution – are these set too high or too low?

b.

Workplace pensions

Remind students that the State Pension currently

provides an annual income of £5,881.20 but that

this figure is far below the amount most people

hope to retire on. The Joseph Rowntree Foundation

have calculated that the Minimum Income Standard

for retired people – the smallest income level

acceptable to ‘participate properly’ in society – is

around £15,000 per year. If time allows you could

look in more detail at what this means by exploring

living costs in retirement and how these might

differ from living costs when you are working.

Ask students how they might increase the amount

of money they have to live on in retirement?

Someone is likely to say ‘by saving money’.

Ask if any of the students have heard of the term

workplace pension or company pension. Explain

to students that through a workplace pension a

percentage of your pay (taken before tax is deducted)

is put into the pension scheme automatically

every payday and that your employer also adds

money into the pension scheme. This money is

not accessible until the age of 55 at the earliest,

and in the meantime the money is invested.

Using MoneySavingExpert.com’s pension

calculator widget, ask students to research how

much someone earning the average UK salary




20

Should payday lendersbe outlawed, strictlycontrolled or allowedto operate freely?

• Introduce information about payday lenders and

how they lend money, focusing on the interest

rates charged.

• Look at case studies of people who have ended up

paying back a great deal of money on top of the

amount borrowed.

• Prepare a series of statements about payday lenders

for students to examine – some supporting them,

others suggesting they be banned, controlled or

regulated (see resource sheet 6). Ask students which

they agree with, disagree with or can’t decide about.

Use this as a basis for class discussion.

• Look at current government actions in this area

(e.g. regulation) and discuss whether these go

far enough.

• Introduce students to credit unions as an

alternative and look at how they work and

how they support the community (www.

moneysavingexpert.com/banking/credit-unions)

• Ask the students to explore other ways of

borrowing money such as credit cards, loans

and hire purchase. Look at how these work and

consider the advantages and disadvantages of

different methods of borrowing.

Societal issue 3

Before deciding to move into a flat share, it’s important to establish the costs involved. The initial move may involve a

number of one off costs, but you will also need to consider the range of ongoing expenses associated with independent

living. Create a budget to establish whether the money you have coming in will cover the money going out to pay for

living expenses. Without careful planning and budgeting, and sometimes even when we try to plan and budget carefully,

expenditure may exceed income, and there are a number of ways to handle a money shortfall, including borrowing. The

cost of borrowing is determined by the interest rate (known as the Annual Percentage Rate or APR) charged over the

length of time you borrow for. Some forms of borrowing, such as payday loans, charge much higher APR than others

(as much as 5,000%). This means that the total cost of the loan can quickly increase and may result in further debt. It has

recently been announced that the Government will introduce a new law to cap the cost of payday loans.

Should I borrow?

Types of borrowing

Payday lending

Risks

Prioritise spending

Needs vs. wants

Can I afford to move into a flat share?

Identify living costs

What if expenditure is greater than income?


Can I afford to move into a flat share?

1

1

1

1 2 3

3

2




21




22


1 Budgeting for your living costs

Hand out resource sheet 5. Tell students that whilst

Emma has some savings to pay for the initial costs

of moving into a new home, she needs to create

a budget to establish whether she can afford the

ongoing living expenses. After covering her living

costs, Emma would also like to be able to save £10

per week.

Ask students to identify all of Emma’s income

each month in one colour and all of the outgoings

(expenditure) in a different colour, and to use this

information to complete the budget planner. Based

on the completed budget planner do student’s think

Emma is able to afford to move into the flat share?

They should find that Emma’s income is £220 and her

outgoings total £223.

Extend this activity by asking whether Emma could

cut back on any items in her monthly expenditure to

make moving a viable option? What might happen if

Emma decides to go ahead with the flat share without

reducing her outgoings?

Ask students to imagine that they are just about to

move out of home and into a flat share. They have

found a single room in a two bedroom flat, sharing

with one other person. Most of the flat is furnished,

but their room is not.

Working in small groups ask students to think about

all the different costs associated with moving into

a flat share and to separate these into one-off costs

(such as a deposit and furniture) and ongoing costs

(such as rent, food and bills).

Share ideas as a class. Are there any notable

omissions? For suggestions see:

www.moneyadviceservice.org.uk/en/articles/

paying-your-own-way

www.severnsidehousing.co.uk/main.

cfm?type=COSTOFRUNNINGAHOME

Begin the second part of this activity by explaining

that many people make a budget to ensure that the

money they have coming in covers the money going

out to pay for their living expenses.

2 Different forms of borrowing

of borrowing as they can. Their suggestions may

include:

• Family and friends

• Secured loan

• Personal loan

• Credit cards

• Overdraft

• Payday loans

Explain to students than almost everyone will need

to borrow money at some point in their lives and

that there are many different reasons why this need

arises. The decision to borrow money should not be

taken lightly and you should only borrow what you

can afford to repay. Whilst this is straight forward in

theory, in practice it can be much more complicated

as there are many different ways to borrow money

and the cost of these can vary considerably.

Ask students to mind map as many different types




23

Budgeting for your living costs

3

Should payday lenders be outlawed, strictly controlled or allowed to operate freely?

Different forms of borrowing

Split the class into pairs or small group and explain

that they are going to research different types of

borrowing, using the following websites:

www.moneysupermarket.com/loans/hubs/payday-

loans/payday-loans-guide/

www.moneyadviceservice.org.uk/en/articles/

deciding-on-the-best-type-of-credit-for-you

Ask students to find the average APR for each form

of borrowing on the list and then rank them from

lowest to highest APR. How does this order compare

with their earlier ranking? Are students surprised by

how much APRs can vary? Students may comment

that payday loans charge so much more interest than

other forms of borrowing. Ask students why they

think people use these if the APR is so high.

On the basis of this discussion ask each group

to decide whether they think payday lenders

should be outlawed, strictly controlled or

allowed to operate freely and to present

their decision, with reasons, to the class.

Write the suggestions on a flipchart or whiteboard

and discuss as a class. Are students able to explain

each of these types of borrowing? It’s important here

to address any misconceptions the students may

have. For further information see: www.adviceguide.

org.uk/wales/debt_w/debt_borrowing_money_e/

debt_types_of_borrowing_e.htm

Explain that the cost of borrowing is determined by

the interest rate charged and the length of time you

borrow for. All forms of borrowing are required to

display the cost as an Annual Percentage Rate (APR),

which means that they can easily be compared.

Working as a class, ask students to have a go at

ranking the different ways to borrow from lowest

to highest interest rate and note the suggestions on

the flipchart/white board. (The list above is in the

correct order, although it doesn’t include all types of

borrowing.)

This activity follows on from Activity 2: Different

forms of borrowing, and requires some basic

knowledge about how payday loans work.

Split the class into small groups and hand out

resource sheet 6 along with three sheets of card –

one red, one orange and one green. Give the groups

time to think about each statement and to decide

as a group, whether they agree (green), disagree

(red) or are not sure (orange). Read each statement

aloud to the class and ask each group to hold up

the card they chose. Ask different groups to explain

why they selected the red, green or orange card.




24

Should everybodyhave the right to abank account?

Societal issue 4

This is concerned with the application of rights to financial products and services. Not having a bank account may lead to financial exclusion and the marginalisation of vulnerable people.

• Look at what a bank account is and the functions

it performs.

• Consider the problems associated with not having

a bank account, e.g. problem of getting wages

and benefits paid, difficulty getting credit, lack of

reference for all sorts of economic activities (credit

scores etc), even being forced into using illegal

money lenders.

• Discuss the reasons why some people can’t get

bank accounts, e.g. poor credit history, criminality

or misuses of money.

• Look at what a basic bank account is and discuss

whether the Government should ensure that

everybody has one so they are not marginalised

in society.

Opening a bank account, and more importantly choosing one that is most appropriate for an individual’s needs, is a

first step in many people’s personal money management. Bank accounts, such as current and savings accounts, offer

security, convenience and, in some cases, the benefit of interest. Despite this there are individuals who do not have

access to a personal bank account. This may be as they choose to opt out of using one, but in many cases it is due

to those individuals having a poor credit score or criminal convictions which means many banks will not offer them a

standard account. The creation of basic bank accounts was intended to provide simple accounts, without the facility to

borrow, in order to make bank accounts more accessible.


Should I open a bank account?

1 2 3

Should I open a bank account?

Why would some people not want, or not be able to get, a bank account?

The concept of basic bank accounts as a solution for those unable to access regular accounts

Different types of bank account for different purposes

Increased security and potentially gaining interest

Facilities to make every day money management more convenient

What’s in it for me?

3

1

1

2




25




26


1

2

Choosing a current account

Should everyone have a bank account?

Young people can often be swayed by these offers

rather than considering the main features of the

account. It is important that they understand that they

should initially be comparing the main features of the

account rather than the perks.

Although some of the young people may already

have a bank account there will be others that may

not. For some it can feel quite intimidating going into

a bank to open an account. Discussing the process

and the identification that might be required can be

useful in allaying these concerns.

• Why may some people not want, or not be able to

access, a regular bank account?

• Some people feel more secure looking after their own money themselves

• There may be a lack of trust towards the banks

• Poor credit history or criminal convictions may make it difficult to open a regular bank account

Once complete take feedback on the students’

thoughts for each question and summarise the key

points.

Again, in small groups, ask students to debate the

question below. This allows them to think about the

challenge that banks can face in making accounts

available to everyone.

• If you were a bank would you provide an account

for everyone who wanted one?

Review the student’s views and explore if there were

any individuals they would not be happy to provide a

bank account to.

Ask the students to look at the three scenarios of the

three individuals in resource sheet 7a. Using the

information they have on Lexi, Jake and Chelsea and

the details of the current accounts A, B, C and D they

should choose which of the four accounts would be

most appropriate for each person.

Take feedback to understand how the decisions were

made. Resource sheet 7b provides the answers and

the reasoning.

Many bank accounts offer perks, which can range

from sums of cash deposited into the account on

opening, to free travel insurance.

Ask students to work in small groups to discuss the

three questions below. For each question they could

develop a mind map, with the question in the middle

of a piece of paper and the ideas they come up with

noted around it.

Some suggested ideas have been provided below,

but students may well come up with many more.

• What is the difference between a current account

and a savings account?

• What do people use their bank account for?

• Withdrawing money from cash machines

• Gaining interest on their savings

• Receiving income from work and benefits

• Making payments (automated regular payments as well as one off payments)

• Accessing borrowing facilities such as overdrafts and credit cards

• Online banking




27

3Choosing a current account Basic bank accounts: An answer to

financial exclusion?

Should everyone have a bank account?

Ask students to research basic bank accounts to find out

exactly how they differ from regular current accounts.

Some useful web links have been provided below,

but students could also find out additional information

from local bank branches.

www.moneysavingexpert.com/banking/basic-bank-

accounts

www.moneyadviceservice.org.uk/en/articles/basic-

bank-accounts

Following their research do students believe that

basic bank accounts can help people who have found

themselves financially excluded from society?

Basic bank accounts are a simplified version of a

current account. They often have limited facilities,

which ensure that the customer cannot access

any form of debt, but they do allow income to be paid

in and for cash withdrawals to be made out of the

account. In some cases debit cards may also

be issued.

The idea behind a basic bank account is that it allows

those customers who cannot access a regular current

account the opportunity to still run an account and

prove that they can manage it effectively. In time,

if a customer can show that they can responsibly

manage a basic bank account, they can improve their

credit rating and may then be able to access a regular

current account.




28

Consumer rights – aremost of us in the dark?

Societal issue 5

Understanding the concept of rights and the law applied to buying and selling goods and services is useful for citizens in their everyday lives. It can also be used to teach students how to argue a case using the law and to practise skills of assertiveness.

• Make students aware of key provisions of

consumer law, e.g. the Sale of Goods Act, 1979

(available on the Trading Standards or Citizens

Advice websites or My Money My Rights by the

Citizenship Foundation).

• Prepare and introduce scenarios of faulty goods or

goods that need to be returned, in particular where

the retailer may be reluctant to comply.

• Ask students to apply the laws and work out what

to say to the retailer.

• Explore the characteristics of assertive behaviour

(as opposed to aggressive behaviour). This

includes expressing your rights in ways that don’t

violate the rights of others. Construct role plays for

students to practise behaving assertively.

When it comes to consumer rights we can often be a little in the dark about exactly what our entitlements are.

Frequently there can be confusion over statutory consumer rights and the enhanced policies offered by many popular

retailers. Such enhanced polices are a gesture of goodwill from the retailer in order to provide good customer service,

and may differ from one retailer to another. Those statutory rights such as the the Sale of Goods Act 1979, apply by

law to all UK retailers. To understand what these statutory entitlements are can prove extremely empowering for

young people, and can help to build confidence in situations where a dispute may arise. Lesser known legislation and

regulation is also covered within this section to provide a broader understanding of the rights we all have as a consumer.


Can I return the jeans I bought in a sale?

1 2 3

Can I return the pair of jeans that I bought in a sale?

The Sale of Goods Act, 1979 offers protection if goods turn out to be damaged, broken or faulty in

some way

Other forms of consumer protection such as the Consumer Credit Act

There is a manufacturing fault

You’ve decided you don’t like them anymore

They don’t fit Why do people return goods?

3

1

1

2




29




30


1

2

Rights behind returning goods

Does consumer law go far enough now that we operate a truly global market?

Explain that only in scenario 1 would a full refund

be guaranteed under consumer rights law. For the

other three scenarios it is at the discretion of the shop

whether they offer a refund or not. The Sale of Goods

Act, 1979 states that any goods should be fit for

purpose and not be damaged, broken or faulty at the

point of purchase.

Explain that if products are bought from a country

within the EU they should have very similar consumer

law to the UK, but outside of the EU this can vary

significantly and would need to be checked with the

country’s authorities. More information on this can be

found on the website below:

www.adviceguide.org.uk/wales/consumer_w/

consumer_different_ways_of_buying_e/consumer_

buying_abroad_e.htm

With students working in small groups ask them to

read through the four scenarios in resource sheet 8.

For each scenario the group should discuss what they

think the rights of the young person are and what

they might be entitled to by way of a refund.

Take feedback from groups on their thoughts for each

of the scenarios, and see whether there is a general

consensus across the class.

With easy access to worldwide sites through the

internet it is very easy to order goods from outside of

the UK. On some of these sites the price of goods can

appear significantly lower than in the UK – a bargain

you may say. But what if there is a problem with what

you have purchased?

Ask students to work in small groups and hand out

red and green sticky notes to each group. They

should discuss in their groups what the advantages

and potential disadvantages are of buying something

from outside of the UK. Once complete ask a member

from each group to stick the green notes in one place

in the room and the red notes in another. Summarise

the feedback.

Working in groups again ask students to produce

a mind map of what issues might be involved in

returning a faulty product bought from outside of

the UK. This could involve a language barrier, cost of

return postage, the source country’s consumer law,

no response to your communications and no physical

address to go to.




31

3

Rights behind returning goods

Does consumer law go far enough now that we operate a truly global market?

Is there anything other than the Sale of Goods Act, 1979 which can help protect me?

The Sale of Goods Act, 1979, is probably the most

well known piece of consumer protection law;

however, there are a variety of further laws which

offer different forms of consumer protection.

Ask the students to work in pairs to research each

of the four laws below using the internet. Using the

table in resource sheet 9 they should summarise the

protection they provide and give an example of when

a consumer may need to use the legislation.

• Consumer Credit Act

• Distance Selling Regulations

• Supply of Goods and Services Act

• Small Claims Court

Once the tables have been completed take feedback

from the groups.

An extension to this activity could be to devise role plays

from some of the examples. This not only builds on the

understanding of the relevant legislation, but can help

to develop student’s self assurance and assertiveness.




32

Is globalisation a forcefor good or evil?

Societal issue 6

The impact of globalisation is a major area of public interest, debate and campaigning. Finance is at its core considering the issue is about profits and returns for multinational companies, as well as cheap goods for consumers. There is also an ethical spending issue for individuals, concerning the human and employment rights of people who live in other countries.

• What is globalisation? Look at different

brands and multinational companies.

• Consider the way multinationals move

production and operations to various parts of

world to reduce costs, lower wages etc.

• Look at a case study of the clothing industry,

e.g. the manufacture of a pair of blue jeans,

for example www.bbc.co.uk/learningzone/

clips/my-jeans-and-globalisation/12006.

html. Compare working conditions and pay

in factories with Ethical Trading Initiative Base

Code (www.ethicaltrade.org/eti-base-code).

• Consider the advantages of globalisation

such as cheaper prices and more

jobs in developing countries.

• Consider the effects on people in Britain,

e.g. variety of cheap goods, loss of

manufacturing jobs, tax issues where

multinationals do not pay tax in UK.

• Debate the notion of ethical spending, for

instance, should you buy goods where you

know cheap labour has been used? Should

the aim of shopping be to get the best value,

especially when a family is short of money?

This could also be linked to budgeting.

• Consider campaigns against multinational

companies who use cheap labour.

• What is the responsibility of individuals? Should

young people participate in such campaigns?

Globalisation has seen large multinational companies exploiting the cheaper labour and manufacturing costs of

developing countries in order to provide cheaper products to the UK market. On the face of it this would appear to be

a financial benefit to UK consumers, but should we consider more than just the price when we buy a product? In some

cases the wages paid to the workers producing the products are extremely low, and their working conditions can be well

below what would be considered acceptable. Given this situation many UK individuals choose to pay a slightly higher

price for goods that they know have been manufactured ethically. Companies can subscribe to ethical codes of practice

such as the Ethical Trading Initiative and Fairtrade to highlight this to consumers.


Should I consider more than price when I buy a product?

1 2 3

Should I consider more than price when I buy a product?

The Ethical Trading Initiative works with global companies to develop ethical trading practices

Are there benefits to me of globalisation?

What is the quality of the product?

How fairly are workers paid and what are their working conditions like?

Where is it made? What else could be considered?

3

1

1

1

2




33




34


1

2

Where does your money go?

Would you pay more for a product you know has been produced ethically?

Ask students to work in small groups to complete the

activity in resource sheet 10. Discuss the outcome

of the activity with the students. Are they surprised at

how the costs breakdown?

Answers: Labour (£2), Distribution (£4), Advertising

(£4), Manufacturers Profit (£6), Profit (£6), Raw

Materials (£7), Retail Outlet Staff (£8), Retailer Profit

(£9), Rent and equipment costs (£10).

Looking at the correct figures (answers above), are

there any ways the students can see to increase the

amount paid for labour at the manufacturing level (in

most cases this will centre on reducing retailer and/or

manufacturing profit)?

they know has been produced ethically, or whether

the lower price is more attractive despite how it

has been produced. Take feedback focusing on the

reasoning behind the decisions.

Ask the same groups of students to consider an

individual living on benefits with very limited income.

Does this affect the choice they would make?

An extension to this activity could be for pairs

of students to develop a poster or leaflet which

highlights the importance to society of choosing

ethically produced products over others.

The price we pay for the goods we buy has to be

split many different ways. The retailers will take their

share, the manufacturers theirs, and the raw material

providers theirs. Depending on the goods being sold

there could be many other parties all taking their

share of the sales price.

One of the issues with companies expanding into

global entities is centred on the use of cheaper

labour in order to manufacture their products. In

order to keep the final sales price as low as possible

some companies can end up paying very little to the

workers involved in the manufacturing process.

With the goods that we buy being manufactured in

one part of the globe, possibly constructed in another

and then sold in another how can we ever be sure

that what we buy has been produced ethically, with a

fair wage paid to all involved?

There are certain industry trade initiatives such as the

Ethical Trading Initiative (www.ethicaltrade.org/) and

the Fairtrade Foundation (www.fairtrade.org.uk/)

which aim to ensure that the companies which sign

up to their standards maintain an ethical approach. As

a general rule, the products produced by companies

that subscribe to an ethical code tend to be slightly

more expensive than others.

Ask students to discuss in small groups whether they

would be prepared to pay slightly more for a product




35

3Where does your money go? What are the benefits of

globalisation to me?

Would you pay more for a product you know has been produced ethically?

Lastly, ask pairs to find a currency conversion website

such as www.xe.com/currencyconverter/. They

can use this to convert the amounts they have in US

Dollars to Pounds Sterling. Having done this they

should be able to compare the cost of the same

products bought in the UK and the US. Are there any

significant price differences?

Whilst there may be some very tempting benefits to

buying products from other countries there may also

be additional issues. Ask pairs to research what issues

there may be when buying products from overseas

and take feedback. This activity could also link to the

consumer rights activities.

The internet has made accessibility to global

companies extremely easy. With just a few clicks

you can buy goods from around the globe from

recognised and trusted brand names.

For this research based activity students will require

access to the internet.

Explain to students that they are going to work in

pairs to research a range of popular products through

a global online retailer – Amazon.

Firstly they should explore the site to find the best

price of the following brand new items:

• SonyPlaystation4(PS4)

• KindleFireHD7”8Gb

• DrDrePowerBeatsheadphonesinred

Once they have a price in pound sterling for each

product ask them to go to the United States version

of the Amazon website (there is a link at the bottom

of the UK website). Pairs should now try to find

exactly the same products on the US Amazon site and

note down the cheapest price for each in US Dollars.

Important note: It is pfeg’s policy not to mention specific brand and company names in resources and activities

for young people, however in this instance it is necessary in order to achieve the learning objectives. Please

do explain to your class that there are other retailers and brands that offer similar and often exact products and

services to those above.

Who earns what?

Resource sheet 1a.


Job role a) Your guess gross annual salary (£)

b) Actual gross annual salary (£)

Airline pilot

Ambulance staff

Bar staff

Chef

Doctor

Financial advisor

Footballer (Premier League)

Headteacher (Secondary)

Lollipop lady £3,178

Machanic

Member of Parliament (MP)

Nurse

Nursery School Assistant

Photographer

Plumber

Police officer £39,346

Postman/woman

Prime Minister

Shop worker £11,174

Solicitor

Teacher (Primary)

Train driver

Vet

£31,000 £73, 000 £45, 489 £142,500 £44,787

£7,317 £70,646 £17,391 £46,797 £26,158

£23,178 £78, 482 £32, 374 £22,854 £676,000

£25,238 £66, 396 £24,242 £11,163 £27,832

Who earns what?

Resource sheet 1b.


Job role a) Your guess gross annual salary (£)

b) Actual gross annual salary (£)

Airline pilot £78,482

Ambulance staff £22,854

Bar staff £7,317

Chef £17,391

Doctor £70,646

Financial advisor £46,797

Footballer (Premier League) £676,000

Headteacher (Secondary) £73,000

Lollipop lady £3,178

Machanic £25,238

Member of Parliament (MP) £66,396

Nurse £26,158

Nursery School Assistant £11,163

Photographer £24,242

Plumber £27,832

Police officer £39,346

Postman/woman £23,178

Prime Minister £142,500

Shop worker £11,174

Solicitor £44,787

Teacher (Primary) £31,000

Train driver £45,489

Vet £32,374

What’s on a payslip

Resource sheet 2.


Salary How much you earn in a year for doing a particular job.

PAYE Tax Pay as you earn: income tax deducted by your employer.

National Insurance A tax which pays for benefits and the State Pension.

Payment period How often you are paid.

Tax code A number to tell your employer how much tax to deduct.

Payment method How your wages will be paid to you.

Net pay Your pay after all deductions.

Pension Your payment to the employer’s retirement scheme.

Overtime Earnings for extra hours you have worked.

Bonus A special performance-related payment.

Union Fees paid for membership of a professional body.

Student loan repayment Deduction that goes towards paying off a student loan.

Tax credit A Government payment either for parents or the low paid.

Rate The hourly rate of pay.

Hours The number of hours you have worked.

Items on a school budget

Resource sheet 3.


Utilities (including, water, heating, electricity) Cleaning contract

Teaching staff salaries Building and grounds maintenance

School trips and the school prom ICT equipment

Insurance services Sports equipment

Text books Stationary

State Pension Q&A sheet

Resource sheet 4.


How much is the full basic State Pension per week? How much does this work out as per year?

How many qualifying years of making National Insurance payments do you need to get the full basic State Pension?

What is the current State Pension age for men? And for women?

What will the State Pension age for men and women be in 2028?

Why is the age of the State Pension increasing?

Emma is 19 and is planning to move out of her parents’ house and into a flat

share. She has found a room in a flat that she likes and has saved up enough

money for the deposit with a bit to spare for some new furniture and bedding,

but before making a final decision she needs to work out whether she can afford

the ongoing costs of living independently. The rent works out at £55 per week

and she has been told by the current occupants of the flat that her share of the

bills (for water, gas and electricity) costs £15 per week and that the council tax

is £10 a week.

Emma works in a supermarket earning £200 per week, and she also babysits

once a week earning an extra £20. She pays around £18 a week to travel to work

and back on the bus, and she enjoys shopping around for bargains and spends

around £10 a week on clothes. As Emma has been living with her parents she

is not 100% sure how much her weekly food bill would be but £40 seems a

reasonable estimate.

Emma enjoys going out with her friends and tries to do this as much as possible, spending around £50 a week going out. There are other smaller

costs that she will need to pay for things like cleaning products, phone top up credit, and insurance which add up to around £25 a week.

Emma’s budget planner

Emma is really keen to move in to the flat share, but is not sure if she can afford it, especially as she also wants to start saving a little money

each week. She needs to write a budget planner to get an idea of how much money she has coming in (her income) and how much money is

going out (her expenditure), to see if saving any money is possible.

Use the information above to fill in her budget planner. Once you have worked out her total income and expenditure see if you think Emma

can afford to move into the flat share?

Emma’s budget

Resource sheet 5.


Income Expenditure

Total: Total:

Scrutinising payday loans

Resource sheet 6.


Statements Agree Not sure Disagree Comments

The person taking out a payday loan needs to be more responsible – they know the consequences of not paying it back quickly.

Advice for customers when struggling with payday loans should be more easily available or more heavily promoted.

Payday lenders offer a very useful service, providing money quickly for people who can’t get money elsewhere.

There is not enough protection for customers against the pitfalls of payday lending.

Payday lenders should not be allowed to advertise on television.

Payday lenders should not be allowed to charge interest rates above 50%.

There are worse forms of lending than payday loans.

Payday lenders should make sure customers do not take out several loans.

Lexi is 19 and following two years at catering college is going to travel around Spain

for six months working in different kitchens. She will be earning money, but there may

be times that she’ll need to use an overdraft. One of her biggest worries is how to get

her money whilst she is in Spain – it can be expensive to withdraw money from cash

machines overseas.

Jake is 22 and has not managed his money well in the past; as a result his credit rating

is poor. Jake would love to have an account which lets him have an overdraft and debit

card, but recognises that he needs to start getting his spending and borrowing under

control first.

Chelsea is 21 and has been working part time for three years, but has now got a full time

job. With this her income has increased and she is looking for an account which will pay

a higher amount of interest. An overdraft is not really needed as Chelsea’s income will

more than cover her spending.

Choosing a current account

Resource sheet 7a.


Account A Account B Account C Account D

Interest None paid 1.5% 1% 0.5%

Cash card ✔ ✔ ✔ ✔

Debit card ✘ ✔ ✔ ✔

Overdraft Limit No overdraft No overdraft £50 £300

Cheque book ✘ ✔ ✔ ✔

Free gift on opening the account

Nothing £30 music voucher £50 added to your account

Free cash withdrawals abroad for one year

Lexi requires an account which can provide her with an overdraft for those periods she is

moving around Spain and not working. Her income is a little sporadic so a good overdraft

would be helpful to make sure she always has enough. The free cash withdrawals abroad

for one year is a great offer for her as she will make use of it during her six months away. She

can now withdraw her money from cash machines in Spain knowing she will not be charged

for doing so.

Although there are some facilities that Jake would like on his account he recognises that he

has a poor credit history, and as such Account A would be the most appropriate. The young

people in the group may recognise Account A as a basic bank account. This means that

whilst Jake will be able to access his money using cash machines, set up payments from his

account and pay money in whenever he needs to, he will not be able to access and forms of

borrowing such as an overdraft or using cheques.

Chelsea has recently increased her income and currently has no need of an overdraft. She

will be in credit on her account and therefore the idea of interest will be more appealing.

Account B provides the highest amount of interest along with a number of other common

current account facilities. The music voucher is a perk, but not something that made Chelsea

choose this account.

Choosing a current account – facilitator notes

Resource sheet 7b.


Lexi – Account D

Jake – Account A

Chelsea – Account B

You get the jeans home and realise that some of the seam is coming apart; this has

created a hole in the side of the jeans. They still have all of their tags on and you’ve not

even tried them on.

On unpacking the jeans you decide that they do not match the rest of your outfit and

think it best to return them and get a refund.

You did not try the jeans on in the shop as you were in too much of a rush. On getting

home and doing so you realise that they are just a bit too small so you’d like to take them

back to swap them for a slightly bigger pair.

You wore the jeans out to a party and the next day discover that there is a small tear at

the bottom of one of the legs. You are sure it couldn’t have happened at the party so

decide it must have been there when you bought them. You would like a full refund on

the jeans.

Can I return the goods?

Resource sheet 8.


Scenario 1

Scenario 2

Scenario 3

Scenario 4

Exploring Consumer Rights

Resource sheet 9.


Legislation and Regulation Summary or content Example of use

Sale of Goods Act, 1979 Goods must be ‘fit for purpose’ when

sold. They must not be broken,

faulty or damaged in any way. The

retailer must either repair or replace

faulty goods’ within a reasonable

time but without causing significant

inconvenience.

You notice that a new camera, straight

out of the box, has a scratch across the

lens, making the photos blurry. This

is a fault with the product and under

the Sale of Goods Act the retailer must

repair, replace or offer a full refund.

Consumer Credit Act

Distance Selling Regulations

Supply of Goods and Services Act

Small Claims Court

The cost of a pair of trainers

Resource sheet 10.


Raw materials

Labour

Manufacturers profit

Distribution

Advertising

Retail outlet staff

Retailer profit

Rent & equipment costs

The cost of the pair of trainers in the image to the right is approximately £50. This is made up of a number of different factors which have been summarised in the boxes:

1. Cut out the boxes and put them into the

order of the most expensive to least expensive

2. Estimate how much of the £50 is used

on each of the processes and write your

estimate on each of the boxes

pfeg (Personal Finance Education Group) is the UK’s leading organisation helping schools to plan and teach children and young people how to manage their money now and in the future.

pfeg’s vision is a society in which all children and young people have the skills, knowledge and confidence to manage their money well, now and in the future.

pfeg’s mission is to support education providers in giving children and young people the skills, knowledge and confidence to manage money. We do this by:

• Influencingpolicyandpractice

• Supportingeducatorsinteachingmoneymatterswithconfidence

• Providingeducationresourcesthatwillengageandinspire

About the CISI

The Chartered Institute for Securities & Investment (CISI) is the largest and most widely respected professional body for those who work in the securities and investment industry in the UK, and in a growing number of major financial centres around the world. Evolved from the London Stock Exchange, we have more than 40,000 members in 110 countries, and in the past year, we set almost 37,000 examinations in 66 countries.

The CISI promotes the advancement of knowledge in the field of securities and investment in schools and colleges by introducing students to the world of financial services and its many career opportunities through qualifications, work experience and insight days and events. Our partnerships with education centres enable educators and industry to work together to disseminate knowledge and offer real world learning experiences to encourage and develop the next generation of financial services talent.

pfeg is a registered charity. Registered number 1081639 pfeg is a company limited by guarantee. Registered number 3943766pfeg is part of Young Enterprise www.y-e.org.uk

T 020 7330 9470/ 0845 241 0925 E [email protected] follow us on twitter @pfeg_orgwww.pfeg.org

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