Unit 1: Personal Financial Encounters (PFE)
Topic 1: Understand the features of legal tender
After completing this topic, you will be able to:
- define ‘money’;
- list and explain the characteristics of money;
- list and explain what makes money legal;
- explain what ‘legal tender’ is;
- explain what happens to old and damaged notes.
Topic 2: Understand the sources of money
After completing this topic, you will be able to:
- explain what 'employment' is and different types of employment;
- list and give short details for some government benefits;
- explain how investment can be a source of money;
- discuss how gifts can be a source of money;
- explain what an 'inheritance' is and the factors that will affect an inheritance.
Topic 3: Documentation for pay and pay calculations
After completing this topic, you will be able to:
- define 'pay as you earn' (PAYE);
- understand a payslip;
- explain and calculate gross pay, net pay and deductions;
- work out pay, including tax;
- work out overtime payments;
- explain sick pay;
- explain the arrangements for repayment of a student loan;
- explain the National Minimum Wage;
- explain how tax is calculated for the self-employed (that is, self-assessment);
- explain the two tax documents - that is the P45 and the P60.
Topic 4: Understand different types of bank account
After completing this topic, you will be able to:
- list the different types of bank account and compare them;
- understand how bank accounts work;
- understand the ways of accessing information about accounts;
- understand special signing arrangements.
Topic 5: Understand the various choices available for storing money
After completing this topic, you will be able to:
- understand the reasons for storing money in a certain way;
- compare the different ways of storing money for short-term savings and long-term investments;
- outline the reasons for choosing to store money in a particular way;
- use these to make choices between products and providers.
Topic 6: Understand and work out the true cost of spending
After completing this topic, you will be able to:
- understand the term 'value for money';
- understand discounts and special offers;
- understand why some products are more expensive than other similar ones;
- understand taxes and hidden charges;
- work out the true cost of spending.
Topic 7: Using money to make money
After completing this topic, you will be able to:
- understand some ways of using your money to make more money.
Topic 8: Using money abroad and foreign exchange calculations
After completing this topic, you will be able to:
- explain what a currency is;
- explain what 'foreign exchange', or 'currency swapping', is;
- define and explain 'variable exchange rates' and 'commission';
- know where to exchange money;
- use the following terminology: types of currency, 'travellers' cheques', 'bureau de change', 'commission' and 'exchange rate'.
- understand foreign exchange rate risk;
- explain how to use cards abroad.