Confused by all the jargon used by financial industry professionals? Use our simple guide to search for the terms you want explained.
- Additional Voluntary Contributions (AVCs)
- AVCs are extra amounts of money which you may choose to save in order to enhance the pension you will receive on retirement. If you are in a company pension scheme, it may be that the amount of money being saved for your retirement is less than you would like. By making extra contributions, you can effectively boost your pot of money and income in retirement.
- Annuity
- A lump sum that a customer gives to a life insurance company to guarantee an income until death. An annuity is the reverse of a mortgage in that instead of getting a lump sum and then paying back monthly amounts to your home lender, you hand over a lump sum and receive monthly payments until you die.
- Arrangement fee
- Lenders sometimes charge a fee to cover the work involved in setting up your mortgage or for certain mortgage rates.
- Base rate
- The minimum level of interest at which banks are prepared to lend money. Also called the repo, or repurchase, rate.
- Basic rate
- A taxation term. The tax system in the U.K. allows you to earn some money without incurring any tax liability - your personal allowance. Earnings above that are taxed at the lower rate, then the basic rate, then the higher rate. The basic rate of income tax has been cut from 33% when the Conservative government took office in 1979 to 23% for 1999/2000 and is now down to 22%. Use our Tax Calculator.
- Basic State pension
- The flat weekly payment you receive when you retire if you have paid enough National Insurance contributions. A married man receives extra if his wife has not paid enough contributions.
- Bridging loan
- A short-term loan often used by purchasers of a property who need funds for a limited period of time, most often until they sell their existing home. Banks and building societies can offer bridging finance.
- Buildings insurance
- What you must have to protect your property against hazards such as fire, flood and subsidence.
- Buildings survey
- This is a technical report following an inspection of your property. It will give you a comprehensive account of the condition of the property, describing any structural or other defects.