5.

would-be first-time buyers… (paragraph 8)

a. people who are going to buy their first home. b. people who would like to buy their first home

6. …remain priced out of the market (paragraph 8)

a. find it very expensive b. can't afford it

B. Find words in the article with the same meaning as the following.
7. overdue mortgage payments (paragraph 1) m____________ a_____________

8. profits (paragraph 4) y____________

9. support (paragraph 7) s____________ u____________

10. low starting point (paragraph 9) l____________ b____________

11. worth less than the current price (paragraph 10) o____________-v____________

C. Complete the definitions.

12. Mortgage arrears are starting to level off means that mortgage arrears …
a. have stopped increasing b. are decreasing
c. are increasing more slowly than they were

13. There was soaring growth in the buy-to-let market means that…
a. profits from buy-to-let mortgages increased b. house prices increased
c. buy-to-let mortgages became more expensive

14. The housing market is buoyant means that …

a. house prices are rising b. house prices are static
c. house prices are falling

15. Investors have been reducing their holdings means that investors have been…
a. buying more shares b. selling all their shares
c. selling some of their shares

16. Interest rate cuts could underpin further growth means that interest rate cuts could…
a. cause further growth b. prevent further growth
c. be caused by further growth

17. Pension cash will flood into the market means that pension fund managers will…
a. avoid this market b. invest heavily in this market
c. make a lot of money from this market

18. New business volumes have grown steadily month on month means that…
a. business has increased every month b. profits have increased every month
c. the number of new customers has increased every month

19. Prices are poised to fall by 7% means that…

a. prices are falling b. prices are expected to fall
c. prices will fall

19
For reference see A & C Black Banking and Finance (978-07136-7739-3)
 8. The
Unit consumer credit boom
0000

A. Read the article, and put these word into the spaces.

credit rating 앫 creditors 앫 creditworthy 앫 into the red

loans 앫 owe 앫 pay it back 앫 write off

1. The people of the United Kingdom are resort to heavy-handed measures such as
estimated to _____________ around a trillion sending in the bailiffs and even (although of
pounds in personal debt, which is about course this is illegal) threatening physical
£16,000 for every man, woman and child. violence.
Much of this debt is of course in the form of 4. Naturally, creditors try to avoid lending
mortgages, but an ever-increasing proportion is money to people who won’t be able to
in the form of consumer credit: unsecured _____________. Although they may not know
_____________ in the form of overdrafts, it, every person who has ever had dealings with
credit card debts, store card debts, hire- a financial institution (for example, had a bank
purchase agreements and the numerous other account) has a credit rating. This data is stored
ways in which the British public are able to on computers by credit reference agencies, and
“buy now, pay later”. before agreeing to a loan, most creditors will
2. An inevitable result of this is that an check the applicant’s _____________.
increasing number of people are taking on However, this information can be misleading.
more debt than they can service. Credit cards Apparently _____________ people may
and store cards especially can have very high already be struggling to keep up the payments
APRs*, and the interest soon mounts up, on their existing debts.
pushing the borrower further and further 5. As well as having potentially disastrous
_____________. Repayment in full may consequences for people who get too heavily
simply become impossible. into debt, the boom in consumer credit could
3. Of particular concern are so called “loan- have serious repercussions for lenders. If
sharks”. While the major lenders such as banks people are genuinely unable to repay their
_____________ millions of pounds every year debts, ultimately there is very little their
in bad debts, small credit companies sometimes _____________ can do about it.

*APR = Annual Percentage Rate

B. Find words in the text which mean the same as the following.

1. Money owed by people, not businesses (paragraph 1) p____________ d____________

2. Paying for something like a sofa or a car in instalments (paragraph 1) h____________-p____________

3. Increases (paragraph 2) m____________ u____________

4. …of all the money (paragraph 2) i____________ f____________

5. Having problems (paragraph 4) s____________

6. Maintain (paragraph 4) k____________ u____________

7. Cause big problems (paragraph 5) h____________ s____________ r____________

20
For reference see A & C Black Dictionary of Banking and Finance (978-07136-7739-3).
B. Answer these questions in your own words.
1. What's the difference between a secured loan and an unsecured loan?

____________________________________________________________________________________________

____________________________________________________________________________________________

2. What's a bad debt?

____________________________________________________________________________________________

3. What does a credit reference agency do?

___________________________________________________________________________________________

4. What does a bailiff do?

____________________________________________________________________________________________

D. Match the phrases on the left with the alternatives on the right.
1. apply for a loan a. arrange a loan

2. set up a loan b. decide the borrower will never repay the loan

3. take out a loan c. get a loan

4. pay back a loan d. repay the loan in instalments

5. pay off a loan e. repay all the loan at once

6. write off a loan f. ask for a loan

E. Which of the following sentences best summarises the article?

1. Creditors have lent too much money, and are starting to have serious problems.

2. British people love to "buy now, pay later", but the majority of them are not
very creditworthy.

3. Creditors are lending more and more money, and this is causing an increase in
debt-related problems.

4. If more creditors used credit-reference agencies, there would be fewer debt-

related problems.

21
For reference see A & C Black Banking and Finance (978-07136-7739-3)
 9. Pensions
Unit 0000 and other financial products

A. Pensions
A pension is a 1 sum / quantity of money paid regularly to a person who has reached a certain age or retired.
It is usually paid until the 2 receiver's / recipient's death, although in some cases a 3 widow / wife may
continue to receive payments after her husband's death.

State pensions
Pensions paid by the state. In many countries, these are contribution-based: people who have not paid
4 sufficient / satisfactory contributions during their 5 work lives / working lives do not receive the full

amount.

Occupational pension schemes

Pension schemes for employees working in a particular industry or for a particular company. In some cases,
these are administered by insurance companies who invest the 6 payments / premiums and use the profits
from this to pay out the 7 benefits / rewards. In other cases they are self-administered: the premiums are
invested by the pension fund 8 trustees / trusteds.

Personal pension schemes

Schemes provided by 9 pension givers / pension providers such as insurance companies and banks. The
premiums are invested in a 10 pension treasure / pension fund, and on retirement the pensioner receives a
11 lump sum / chunk sum to invest in an annuity (see below). Personal pension schemes are also known as

12 "private pensions" / "alternative pensions".

B. Financial products

Match the financial product with the benefits.

1. annuity a. If you're too ill to work, you receive payments.

b. You pay a lump sum, and receive regular payments for the rest
2. life insurance
of your life.

3. life assurance c. You receive a lump sum on a certain date (or earlier if you die).

4. endowment assurance d. Your beneficiaries receive money if you die young.

e. You borrow money to buy a house. Many years later, your

5. endowment mortgage endowment repays the loan.

6. private health insurance f. You borrow money. When you die, your house is sold to repay
the loan.

7. sickness insurance
g. Your beneficiaries receive money when you die.

8. equity release scheme h. Your private hospital bills are paid.

22
For reference see A & C Black Dictionary of Banking and Finance (978-07136-7739-3).
C. Choose the best word to complete the sentence.
1. A person who gives you information about financial products is a __________.
a. financial adviser b. financial helper c. financial assistant

2. Some financial advisers only earn money by giving advice. Others earn ________ from selling
financial products.
a. wages b. payments c. commission

3. An actuary is a person who __________ insurance risk and calculates premiums.

a. thinks about b. assesses c. decides

4. When an endowment __________, you receive a lump sum.

a. finishes b. ends c. matures

5. Prices go up every year. This is because of __________.

a. inflation b. expansion c. evolution

6. Some pension payments increase every year __________ inflation.

a. in time with b. in line with c. at the speed of

7. Pension payments which increase in line with inflation are __________.

a. index connected b. index linked c. index controlled

8. Many financial analysts predict a __________ caused by too many pensioners and not enough
workers.
a. pensions crisis b. pensions disaster c. pensions emergency

9. A small additional pension is known as a __________.

a. topper pension b. topping pension c. top-up pension

10. Banks and insurance companies are types of __________.

a. financial institution b. finance company c. financier

11. Pension funds are usually administered by a __________ of trustees.

a. group b. bunch c. board

12. Pension funds, insurance companies and other financial institutions that invest on the stock
market are known as __________.
a. commercial investors b. institutional investors c. company investors

13. Individual people who invest on the stock market are known as __________.
a. private investors b. personal investors c. one-man investors

14. In most countries, financial products and services are __________ by the government.
a. watched b. decided c. regulated

23
For reference see A & C Black Banking and Finance (978-07136-7739-3)
 10. Insurance
Unit 0000

A. Match these types of insurance with the definitions.

1. Third party only a. Home insurance covering the fabric of the building only.

2. Third party fire and theft b. Pays out if you die or after a set period - whichever is later.

c. Home insurance covering most risks.

3. Fully comprehensive
d. Motor insurance. Will only pay claims made against you by
4. Buildings only others.

e. Covers the costs of private health care.

5. Buildings and contents
f. Motor insurance. Will pay claims made against you by others
6. Third party liability plus damage caused by fire.

7. Worldwide travel g. Motor insurance covering all risks.

h. Covers claims made against you by others, for example if you

8. Private health run a business.

9. Indemnity insurance i. Insurance cover for problems while on holiday abroad.

10. Personal injury j. Any insurance which covers financial loss (numbers 1 to 8 are
types of indemnity insurance).
11. Life k. Pays out in the event of a personal accident.

B. Put the words into the correct spaces.

take out 앫 broker 앫 quote 앫 premium

covered 앫 claim 앫 pay out 앫 fill in

How to ______________ an insurance policy.

1. Choose an insurance ______________, or contact an insurance company direct.

2. Phone up and get a ______________ (or you can do this on the internet).

3. Pay the ______________.

4. Now you're ______________.

5. If you need to make a ______________, contact the insurance company.

6. You will probably have to ______________ a claim form.

7. You may have to wait several weeks for the insurance company to ______________.

24
For reference see A & C Black Dictionary of Banking and Finance (978-07136-7739-3).