CISI – Financial Products, Markets & Services Topic – Introduction to financial services The importance of financial services to the UK

Tales from the Credit Crunch Impact on individuals Loss of jobs Change in spending habits - cutting back or going without – more likely to save money than spend it Homes repossessed – unable to keep up with mortgage repayments Increase in stress, pressure and worry – impact on family life Difficult to borrow money – lending dried up Bankruptcy Impact on businesses Reduced demand – redundancies and cut backs had to be made Debtors – delays in being paid or not paid at all Creditors – businesses unable to meet their obligations Difficult to borrow money – cannot expand or continue operating Reduced business confidence Positives New opportunities emerged but not always positive Greater emphasis on managing spending and debt New regulations

The importance of financial services to the UK economy Gross Domestic Product (GDP) The importance of financial services to the UK economy Employment Key export Tax contributions

Gross Domestic Product (GDP) The importance of financial services to the UK Economy Gross Domestic Product (GDP) Financial services accounts for nearly 10% of UK GDP Compared with other developed economies, financial services share of GDP in UK has grown rather than slowed down Employs over 1 million people in the UK with another 1 million in professional services (7% of total UK employment) 416,800 people employed in banking 308,700 people employed in insurance 41,600 people in employed in fund management Employment

Key export Tax contributions The importance of financial services to the UK Economy Key export UK surplus in financial services is larger than the combined surplus of all other net exporting industries in the UK The UK is the world’s leading exporter of financial services. Tax contributions 2014/15 financial services total tax take in the UK - £66 billion Represents 11% of total UK government receipts

Regional divisions – UK employment in financial and professional services Scotland 156,700 North East 49,000 233,000 North West Yorkshire 136,500 Northern Ireland 32,200 East Midlands 81,700 West Midlands 127,000 East England 157,500 Wales 54,300 London 714,000 South West 162,100 South East 272,600

UK average gross salary for full-time employees = £27,200 Regional divisions – UK employment in financial and professional services Area of employment Average UK graduate starting salary in 2016 Graduate £29,000 Investment Banking £40,000 Law £39,000 Banking and finance £33,000 Accounting £30,000 IT and Telecommunications £29,500 Media £27,000 Retail £25,000 Armed Forces £25,000 Public Sector £22,400 Newly qualified teacher (England and Wales) £22,023 to £27,543 UK average gross salary for full-time employees = £27,200 Source: The Graduate Market in 2014