Topic 10

• Jess Foster is 22 and single and she graduated recently from art college with a degree in graphic arts, specialising in photography
• Three months ago, Jess started a job assisting photographer Paul Dutton in his studio and on outside assignments
• Jess is excited about her job because she wants to have her own photography business one day
• Paul is very busy as he has a lot of clients. He photographs a lot of weddings and other events at the weekends
• Jess can use public transport to get to Paul's studio from her flat, which she rents with friends. But getting to outside assignments can be difficult
• Moped


  125cc moped that will cost £2,070 'on the road', the retail price plus the first registration fee and vehicle excise duty (road tax)
• Jess has passed the driving test she needs (the CBT) but she has to budget for other expenses like protective clothing and insurance, which will cost about £900
• Jess's salary


  £18,000 gross per year
• Jess is repaying £12,000 of student debt to the Student Loans Company, but has no other debts
• Jess has worked out a budget using her net salary figure and her bills over the last three months. She is planning for a surplus of £160 per month. She has £200 in her savings account
• Jess has decided to borrow money to buy the moped although she is concerned about taking on more debt
• Mike, one of Jess's flatmates, tells her: 'Don't worry about borrowing money. If you cannot make the repayments, you can always sell the moped'
• Jess's mother advises her: 'Make sure you know what your repayments will be every month and that you can meet them'
• Personal loans Jess has found information about

  • Moped Maker Loan
  • Blue Bank Loan
  • Yellow Bank Loan
• Moped Maker Loan


  • £2,070 loan amount
  • £99 deposit
  • 36 month term
  • £58.89 monthly repayment
  • 4.9% APR
  • No arrangement fee
  • No early repayment fee
  • No repayment holiday
  • Overpayments allowed
  • Restricted to on-road price of specific moped
  • £8,000 earnings threshold
• Blue Bank Loan


  • £3,000 loan amount
  • 0 deposit
  • 36 month term
  • £100 monthly repayment
  • 12.9% APR
  • No arrangement fee
  • 58 days' interest early repayment fee
  • Repayment holiday at any time
  • Overpayments allowed
  • Restricted to graduates who have held a Blue Bank current account for 12 months or more
  • £14,000 earnings threshold
• Yellow Bank Loan


  • £3,000 loan amount
  • 0 deposit
  • 36 month term
  • £95 monthly repayment
  • 8.9% APR
  • No arrangement fee
  • 58 days' interest early repayment fee
  • Repayment holiday at start of loan
  • No overpayments allowed
  • Restricted to graduates who have held a Yellow Bank current account for 3 months or more
  • £10,000 earnings threshold
• Rob Walker is 25 years old and is a self-employed plasterer and decorator who lives in a rented house with two friends
• Rob normally earns around £1,400 per month after paying his business expenses but this is gross of tax and National Insurance
• Rob has enough work for the next six weeks in his order book
• Rob is hoping to get a three-month contract with a local builder to replaster and redecorate a large property that is being turned into a care home for the elderly
• Rob is paying off a four-year bank loan he took out exactly one year ago to buy a van for work
• Rob is saving for a holiday next summer with his girlfriend Megan
• Rob wants to move to a rented home of his own next year
• In the next three to five years Rob wants to get married, buy his own home and start a family
• Rob wants to pay off the van loan before applying for a mortgage
• Rob has just inherited £22,000 from a distant relative
• Rob is happy with the customer service he has received from his building society and he likes their approach to social responsibility
• The return Rob gets on his instant access cash ISA is only 0.25% AER
• Rob thinks he might get a higher return if he saves for a longer term
• Rob uses a computer for his business and likes the idea of applying for and operating a savings account online
• Rob's friend Max: 'I've read that now is the right time to invest in shares because they are so cheap. Share prices are bound to increase in the next five years or so.'
• Rob's father: 'I'd use your inheritance to pay off your debts. It doesn't make sense to be paying 5.9% interest on your loan and earning such a low interest on your savings.'
• Savings/investment products offered by Green Building Society

  • Online cash ISA
  • Stocks and shares ISA
  • 3-year e-Bond
• Online cash ISA


  • Minimum deposit £1
  • Maximum deposit £20,000
  • Transfers allowed
  • Instant access
  • 2.20% AER
  • No charges
• Stocks and shares ISA

  • Minimum deposit £1,000
  • Maximum deposit £20,000
  • Transfers allowed
  • Two weeks' notice for access
  • Past performance: 21.72% over 3 years
  • Initial charge 1%
  • Annual management charge 1.5%
• 1. year e-Bond


  • Minimum deposit £1
  • Maximum deposit £5 million
  • No transfers allowed
  • Access only at end of term
  • 2.40% AER gross, 1.92% AER net
  • No charges
• There are two main types of ISAs: stocks and shares ISA and cash ISA
• Rob has already paid £500 into an instant access cash ISA this year
• Rob may be able to transfer the £500 into a different ISA product, depending on the terms and conditions