Responsible for protecting the financial stability of the economy as a whole.
Sets interest rates at a level designed to help achieve a stable economy.
Lends to banks
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Disadvantages of Bank of England
Not a bank for members of the general public.
Can raise interest rates making borrowing more expensive
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Advantages of Banks
Offer a range of services and account types.
Provide a secure place to store money.
Pay interest on credit balances on most types of accounts.
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Disadvantages of Banks
Savings are only protected up to the value of £75,000 , so if a bank goes bankrupt savings above this would be lost.
Profit-making organisations owned by shareholders, therefore costs to individuals may be higher than necessary in order to fulfil sharehol
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Advantages of Building Societies
Offer a range of services and account types.
Provide a secure place to store money.
Pay interest on credit balances on most types of accounts.
Owned by members and therefore costs can be kept down allowing for higher interest payments.
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Disadvantages of Building Societies
Savings are only protected up to the value of £75,000 , so if the building society goes bankrupt savings above this would be lost.
May lack the business drive of a commercial bank.
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Advantages of Credit Unions
Offer a range of services and account types.
Provide a secure place to store money.
Owned by members and therefore costs can be kept down allowing for higher interest payments.
Often offer additional benefits to the community or a good cause
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Disadvantages of Credit Unions
Savings are only protected up to the value of £75,000 , so if the credit union goes bankrupt savings above this would be lost.
May lack the business drive of a commercial bank.
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Advantages of National Savings and Investment
Government-backed, therefore offering security on 100% of savings with no upper limit.
Offers additional services/methods of savings
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Disadvantages of National Savings and Investment
Rates are variable
Not as easy to access due to lack of a high street presence.
Often required to give notice on withdrawals
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Advantages of Insurance Companies
Protect against unexpected losses or financial expenses.
Easy and regular monthly payments make planning easy.
Wide range of services and levels of cover to suit the needs of individuals
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Disadvantages of Insurance Companies
Premiums are assessed on the estimated degree of risk which may be seen to penalise some members or groups of society too harshly.
Profit-making organisations, therefore premiums will not be charged to ensure shareholder needs are met.
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Advantages of Pension Companies
Provides a structure to help plan for financial security after retirement.
Deductions can be taken directly from pay and be fully or partially matched by an employer's contribution.
Experts are employed to make investment decisions
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Disadvantages of Pension Companies
Poor investment decisions by the pension company may result in a disappointing return.
Money already invested in a pension cannot be released prior to the dates agreed in the policy
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Advantages of Pawnbrokers
A quick way of acquiring cash needed for a short period of time.
The asset can be brought back within a set period of time.
Interest is not charged
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Disadvantages of Pawnbrokers
The amount given for the asset is often substantially lower than its actual worth.
If the money is not repaid within the agreed period, the asset will be sold on
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Advantages of Payday Loans
A quick way of acquiring cash needed for a short period of time
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Disadvantages of Payday Loans
Interest charges are likely to be very high.
Often results in paying back a final sum substantially higher than the initial amount borrowed
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Other cards in this set
Card 2
Front
Disadvantages of Bank of England
Back
Not a bank for members of the general public.
Can raise interest rates making borrowing more expensive
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