Test your financial knowledge with these 10 questions.
Q1) You pay £50 a month into an account paying 2% interest a year. How much money will you have after one year?
Q2) What is phishing?
a) Dangling a rod in a river and waiting for fish to bite.
b) A type of scam where you receive fake emails from companies such as banks asking for passwords and other personal information.
c) A scam where you encouraged to buy high-risk investments on the promise of high returns.
Q3) You’ve started a full-time job and your employer has set up on a pension for you. Your boss says that in addition to your own and your employer’s contributions the government will pay in as well. How does this work?
a) It tops up your contribution by a flat rate of 30%.
b) It offers tax relief, paying the tax you would have paid on your pension contributions, back into your pension.
c) It matches your employer’s contributions.
Q4) You have just received your National Insurance number. Why will you have to pay NI when you start work?
a) It covers your costs if you crash your car or your house is burgled.
b) It pays for vital services such as road repairs, bin collections and social care where you live.
c) It builds up your entitlements to certain state benefits including the state pension, sick pay and maternity pay.
Q5) This year the personal allowance is £12,500. What is this?
a) The amount you can pay into an ISA in each tax year.
b) The amount of money you can earn each year before you start needing to pay income tax.
c) The maximum amount you can contribute to a pension each year.
Q6) Your parents want to save money on their mortgage. They are paying their lender’s standard variable rate of 3.99%. What do you suggest they do?
a) Nothing – their mortgage runs for 25 years so they’ll need to find other ways to save.
b) Speak to their lender and see if they can switch them to another deal.
c) Shop around across the mortgage market to see if they can find a deal with a cheaper mortgage rate.
Q7) What does SIPP stand for?
a) Self-inflicted personal punishment
b) Self-invested personal pension
c) Self- insured protection policy
Q8) Mrs Green your economics teacher has started talking about liquidity – what is she on about?
a) She’s clearly thirsty and wants someone to put the kettle on.
b) She is talking about how easy it is to sell an asset to raise money. Liquid assets are easy to sell, illiquid assets are more difficult to sell.
c) Liquid assets are those that bought and sold most frequently.
Q9) What is a corporate bond?
a) A loan to companies, which pay a fixed rate of interest to investors.
b) An insurance policy businesses buy to make sure they can always pay their staff.
c) When different companies get together to share their resources and lower their individual overheads.
Q10) What is a dividend?
a) A sum of money paid out regularly by companies to its shareholders from its profit.
b) A fee companies must pay to all of their investors.
c) A tax investors need to pay when they buy shares in a company.
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