BTEC Business: Financial Institutions, Protection and Advice

This material trains section B of Unit 3, Personal and Business Finance, in the Pearson BTEC Level 3 National Business qualifications: exploring the personal finance sector. It covers the four content areas of that section: the features of financial institutions, how they communicate with customers, consumer protection, and sources of information, guidance and advice. Personal finance forms Section A of the Unit 3 examination, which carries about a third of the marks.

The institutions are those the specification lists: the Bank of England, banks, building societies, credit unions, National Savings and Investments, insurance and pension companies, pawnbrokers and payday lenders. You practise what makes each one different, such as mutual ownership, a common bond, Treasury backing or a loan secured on a possession, and who each one suits. A short calculation shows how the FCA's cap on the daily cost of a payday loan works.

Consumer protection is treated precisely, because the three bodies are easy to confuse: the Financial Conduct Authority regulates firms, the Financial Ombudsman Service settles individual complaints once the firm has had its chance, and the Financial Services Compensation Scheme pays out when a firm fails, with the deposit limit of £120,000 per person per firm that has applied since 1 December 2025. Consumer credit legislation appears through section 75 of the Consumer Credit Act 1974. The advice section compares Citizens Advice, independent financial advisers, price comparison websites and debt counsellors, and explains Individual Voluntary Arrangements and bankruptcy.

The quiz has twelve scenario questions, each explaining why the other options are wrong. The flashcards hold the roles and key facts. The written work has eight longer tasks marked against key points, including comparing the FCA, the ombudsman and the FSCS, comparing banks, building societies and credit unions, evaluating a comparison website against an adviser, an IVA against bankruptcy, workplace pensions and advice for someone falling behind on credit cards. The exam is a conversation with an examiner who describes a person with a financial problem, asks where they should go and why, and gives brief feedback at the end.

Limits and rules are stated as they stand in the 2025 to 2026 school year and may change; people and figures in the scenarios are invented, and all questions are original practice material rather than extracts from Pearson papers.

• Describe the features, advantages and disadvantages of banks, building societies, credit unions, NS&I, pawnbrokers and payday lenders, and the role of the Bank of England
• Explain the separate roles of the FCA, the Financial Ombudsman Service and the FSCS, including the current deposit limit
• Apply section 75 of the Consumer Credit Act 1974 to a purchase
• Compare Citizens Advice, independent financial advisers, price comparison websites and debt counsellors
• Explain Individual Voluntary Arrangements and bankruptcy and when each might be used

Practice material written by Zestly, based on Pearson BTEC Level 3 National Business (2016 suite), Unit 3 Personal and Business Finance, B1 Features of financial institutions, B2 Communicating with customers, B3 Consumer protection and B4 Information, guidance and advice (specification Issue 15, April 2023). Current limits from the FSCS (deposit limit £120,000 from 1 December 2025) and FCA rules on high-cost short-term credit.