A pension is a 1 sum/ quantityof money paid regularly to a person who has reached a certain age or retired. It is usually paid until the 2 receiver's/ recipient'sdeath, although in some cases a 3 widow/ wifemay continue to receive payments after her husband's death.
Pensions paid by the state. In many countries, these are contribution-based: people who have not paid 4 sufficient/ satisfactorycontributions during their 5 work lives/ working livesdo 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/ premiumsand 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 providerssuch 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 sumto invest in an annuity (see below). Personal pension schemes are also known as 12 "private pensions" / "alternative pensions".
Exercise 2.Match the financial product with the benefits.
a. If you're too ill to work, you receive payments.
b. You pay a lump sum, and receive regular payments for the rest
of your life.
c. You receive a lump sum on a certain date (or earlier if you die).
d. Your beneficiaries receive money if you die young.
e. You borrow money to buy a house. Many years later, your
endowment repays the loan.
6. private health insurance
f. You borrow money. When you die, your house is sold to repay
g. Your beneficiaries receive money when you die.
8. equity release scheme
h. Your private hospital bills are paid.
Exercise 3. Choose the best word to complete the sentence.
1. A person who gives you information about financial products is a __________.
3. I'm insured for/ bythe Lion Rock Insurance Company.
4. This sculpture is insured for/ at£100,000.
5. I'm insured to/ fordrive any car.
6. I'm covered by/ forall risks.
7. Which insurance company are you with/ in?
Exercise 8. This exercise defines the most important kinds of bank. Complete the text using these words:
____________ supervise the banking system; fix the minimum interest rate; issue bank notes; control the money supply; influence exchange rates; and act as lender of last resort.
_____________ are businesses that trade in money. They receive and hold deposits in current and savings accounts, pay money according to customers instructions, lend money, and offer investment advice, foreign exchange facilities, and so on. In some countries such as England these banks have branches in all major towns; in other countries these are smaller regional banks. Under American law, for example, banks can operate in only one state. Some countries have banks that were originally confined to a single industry, e.g. the Credit Agricole in France, but these now usually have a far wider customer base.
In some European countries, notably Germany, Austria, and Switzerland, there are ____________ which combine deposit and loan banking with share and dealing, investment advice, etc. Yet even universal banks usually form a subsidiary, known as a ________ , to lend money at several per cent over the base lending rate for hire purchase or instalment credit, that is, loans to consumers that are repaid in regular, equal monthly amounts.
In Britain, the USA and Japan, however, there is, or used to be, a strict separation between commercial banks and banks that do stockbroking or bond dealing. Thus in Britain, _________ specialize in raising funds for industry on the various financial markets, financing international trade, issuing and underwriting securities, dealing with takeovers and mergers, issuing government bonds, and so on. They also offer stockbroking and portfolio management services to rich corporate and individual clients. _________________ in the USA are similar, but they can only act as intermediaries offering advisory services, and do not offer loans themselves.
Yet despite the Glass-Steagall Act in the USA, and Article 65, imposed by Americans in Japan in 1945, which enforce this separation, the distinction between commercial and merchant or investment banks has become less clear in recentyears. Deregulation in the USA and Britain is leading to the creation of financial supermarkets conglomerates combining the services previously offered by stockbrokers, banks, insurance companies, etc.
In Britain there are also __________ that provide mortgages, i.e. they lend money to home-buyers on the security of houses and flats, and attract savers by paying higher interest than the banks. The savings and loan associations in the United States served a similar function, until most of them went spectacularly bankrupt at the end of the 1980s.
There are also ___________ such as the World Bank or the European Bank for Reconstruction and Development, which are generally concerned with economic development.
Exercise 9. All the words below can be combined with words bank or banking in a two-word partnership, e.g. bank holiday or off-shore banking. Add the word bank or banking before or after each of the words below.