Glossary
Annual Management Charge
Annual management charge (AMC) is the charge (usually a set percentage) levied each year by fund managers to cover the cost of the running their fund. This plus any additional fund expenses or charges make up the total expense ratio (TER).
Annuity
An annuity is a contract between you and a 3rd party (usually an insurance company) whereby in exchange for making a lump sum payment, the insurance company promises to either or all of the following four things:
Auto Enrolment
Auto-enrolment is the term used by the Government to describe the now compulsory automatic enrolment of employees into a company pension or the National Employment Savings Trust (NEST).
Annual management charge (AMC) is the charge (usually a set percentage) levied each year by fund managers to cover the cost of the running their fund. This plus any additional fund expenses or charges make up the total expense ratio (TER).
Annuity
An annuity is a contract between you and a 3rd party (usually an insurance company) whereby in exchange for making a lump sum payment, the insurance company promises to either or all of the following four things:
- Provide an income for a certain period of time,or for life
- Provide for accumulation, or asset growth
- Provide a death benefit
- Provide for long term care benefits
Auto Enrolment
Auto-enrolment is the term used by the Government to describe the now compulsory automatic enrolment of employees into a company pension or the National Employment Savings Trust (NEST).
Bank of England Base Rate
Bank Rate is the interest rate charged by the Bank of England when they lend to commercial banks. This influences the interest that banks pay to customers on savings and the interest they charge on mortgages, credit cards and other borrowing.
Beneficiary
A beneficiary is someone who you wish to receive a part of your estate on your death, they should be named in your will along with what you would like them to receive. A beneficiary of a trust is a person for whom a trust was created, and who receives the benefits of that trust.
Bank Rate is the interest rate charged by the Bank of England when they lend to commercial banks. This influences the interest that banks pay to customers on savings and the interest they charge on mortgages, credit cards and other borrowing.
Beneficiary
A beneficiary is someone who you wish to receive a part of your estate on your death, they should be named in your will along with what you would like them to receive. A beneficiary of a trust is a person for whom a trust was created, and who receives the benefits of that trust.
Equity Release
Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
Euribor
Euribor are rates offered to prime banks on euro interbank term deposits. The EURIBOR is based on average interest rates established by a panel of around 50 European banks (panel banks) that lend and borrow from each other. There are 8 Euribor rates and maturities vary from a week to a year and their rates are considered among the most important in the European money market.
Executor
An executor is the person named in your will who is in charge of valuing your estate, paying your debts and distributing what is left per your instructions in your will.
Expression of Wish
Most pension funds are held in trust outside of your estate and therefore are not directly covered by your will. So it’s recommended you complete an “expression of wish form”, though without one, the pension provider will usually pay your funds into your estate.
The form is a request to the trustees or the scheme administrator of your pension scheme, setting out who you would like to receive any death benefits payable on your death without it going through your estate. It's not binding on the trustee or scheme administrator, but they would normally be expected to take your wishes into consideration when making their decision. You don't have to provide an expression of your wishes, but it does help the trustee or scheme administrator if you do.
The expression of wish form may be changed at any time and the trustees of the scheme will act on the last form they received before your death.
Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
Euribor
Euribor are rates offered to prime banks on euro interbank term deposits. The EURIBOR is based on average interest rates established by a panel of around 50 European banks (panel banks) that lend and borrow from each other. There are 8 Euribor rates and maturities vary from a week to a year and their rates are considered among the most important in the European money market.
Executor
An executor is the person named in your will who is in charge of valuing your estate, paying your debts and distributing what is left per your instructions in your will.
Expression of Wish
Most pension funds are held in trust outside of your estate and therefore are not directly covered by your will. So it’s recommended you complete an “expression of wish form”, though without one, the pension provider will usually pay your funds into your estate.
The form is a request to the trustees or the scheme administrator of your pension scheme, setting out who you would like to receive any death benefits payable on your death without it going through your estate. It's not binding on the trustee or scheme administrator, but they would normally be expected to take your wishes into consideration when making their decision. You don't have to provide an expression of your wishes, but it does help the trustee or scheme administrator if you do.
The expression of wish form may be changed at any time and the trustees of the scheme will act on the last form they received before your death.
Insurable Interest
The doctrine of insurable interest broadly states that in order to have a valid policy of insurance/assurance, the policyholder must:
(1) gain a benefit from the continued existence of the item being insured; or
(2) suffer a loss on its destruction.
This concept applies to all forms of assurance and insurance.
The doctrine of insurable interest broadly states that in order to have a valid policy of insurance/assurance, the policyholder must:
(1) gain a benefit from the continued existence of the item being insured; or
(2) suffer a loss on its destruction.
This concept applies to all forms of assurance and insurance.
LIBOR
Libor, the London inter-bank lending rate, is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. It is a global benchmark interest rate used to set a range of financial deals.
Lifetime Allowance
There is no limit on how big your pension fund can grow to, however you will have a lifetime allowance in relation to the maximum amount of tax-relieved benefits you can build up over your lifetime. If you think you are affected by this limit you can get more information visit HMRC website at www.hmrc.gov.uk.
Limited Company
A British term for a corporation, a limited company is a business entity that limits the liability of shareholders to the extent of their investment.
Loan to Value (LTV)
The ratio between the value of an asset (such as property) to the value of the loan that will finance the purchase of that asset. LTV tells the lender if potential losses due to non-payment may be recouped by selling the asset.
Lower Earnings Limit
If you are an employee, the lower earnings limit is the point at which your earnings start to build up entitlement to state pension benefits. The 'primary threshold' is the point at which you start to pay National Insurance contributions.
Libor, the London inter-bank lending rate, is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. It is a global benchmark interest rate used to set a range of financial deals.
Lifetime Allowance
There is no limit on how big your pension fund can grow to, however you will have a lifetime allowance in relation to the maximum amount of tax-relieved benefits you can build up over your lifetime. If you think you are affected by this limit you can get more information visit HMRC website at www.hmrc.gov.uk.
Limited Company
A British term for a corporation, a limited company is a business entity that limits the liability of shareholders to the extent of their investment.
Loan to Value (LTV)
The ratio between the value of an asset (such as property) to the value of the loan that will finance the purchase of that asset. LTV tells the lender if potential losses due to non-payment may be recouped by selling the asset.
Lower Earnings Limit
If you are an employee, the lower earnings limit is the point at which your earnings start to build up entitlement to state pension benefits. The 'primary threshold' is the point at which you start to pay National Insurance contributions.
Risk Profile
A risk profile is an evaluation of an individual or organization's willingness to take risks, as well as the threats to which an organization is exposed. A risk profile is important for determining a proper investment asset allocation for a portfolio. Organizations use a risk profile as a way to mitigate potential risks and threats.
A risk profile is an evaluation of an individual or organization's willingness to take risks, as well as the threats to which an organization is exposed. A risk profile is important for determining a proper investment asset allocation for a portfolio. Organizations use a risk profile as a way to mitigate potential risks and threats.