Glossary

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A

Annuity

An annuity is guaranteed income paid for the rest of your life. You buy one using cash, usually provided by a pension fund.

Asset classes

Different types of investment.

AVC

Short for additional voluntary contributions, which are extra contributions you pay into a company pension plan to top up the standard contributions.

B

Borrow back

Having a borrow back facility on your mortgage means you can access any overpayments you may have previously made - by borrowing it back.

C

Capital growth

The money you make when you sell or cash in your investment for a profit.

Consolidating

Consolidating debt is when you take out a single, new loan to pay off several existing debts.

D

Deposit account

A deposit account is a current account, savings account or other type of bank or building society account that allows you to pay in and take out money.

Dividend

A dividend is money that is paid out to shareholders by a company from its profits.

E

Emerging markets

Countries that are in the process of rapid growth and industrialisation.

Equities

Equities are another name for stocks and shares. A share is a small stake in a company.

Equity

Equity is the amount of money you have tied up in your home - that is the current value of your property less your mortgage (or other loan secured against it). If you have no mortgage or loan, it is the value of your house.

I

ISA

ISA stands for "Individual Savings Account" and is a tax-free savings account.

P

Portfolio

A portfolio is a mix of different investments held by a person or an institution.

Possessions

Items that are not permanently attached to the structure of your home, like furniture.

Q

Quoted company

Quoted companies are those which have shares that are traded on a stock exchange.

S

SIPP

A SIPP is a "Self Invested Personal Pension" which allows you to manage your own investments.

Smallcap

Smallcap is a term for quoted companies with a relatively small market value. the definition of smallcap varies in different countries, but in the UK it generally applies to companies with a total share value of less than £300 million.

Standard Variable Rate (SVR)

This is the main mortgage rate offered by the lender. The SVR goes up and down as interest rates rise and fall. The SVR is also the interest rate to which most mortgages revert after a deal has finished.

T

Tax year

The tax year runs from 6 April each year to the following 5 April.

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