Jargon Buster

G

Gilt (Gilt Edged Security)
A fixed-interest bond or security issued by the British Government.

GPP (Group Personal Pension)
An arrangement made for employees of a particular employer to participate in a personal pension scheme on a group basis.

H

Hedging
A strategy designed to offset investment risk.

I

IFA - Independent Financial Adviser
A professional financial expert who must by law give impartial "best advice" on financial companies, markets and products. IFAs are completely independent and can recommend the products of any company.

IMRO
Investment Management Regulatory Organisation, the body that regulates the management of unit trusts.

Income Drawdown
Facility by which you can draw an income from your pension fund while keeping the rest fully invested until the age of 75 at the latest.

Income Tax
Tax payable if you have income above the minimum level taxable in the UK.

Index
The means of measuring movement of statistics over a period of time used as a benchmark by unit trust managers.

Index-linked
Payments protected against the effects of inflation by increasing in line with the changes in the index of retail prices.

Inflation
The amount in percentage terms by which prices rise or fall year on year.

Inheritance Tax
Tax payable after you die on the value of your assets in excess of a certain threshold value (£300,000 at January 2008) although gifts between husband and wife are exempt. It is also chargeable in certain circumstances while you are still alive.

Initial Charge
A charge levied by your investment manager to cover administration and sales commission when you invest in a fund.

Interest-only Mortgage
A mortgage product where you make a monthly interest payment and rely on the a savings plan or other monies to pay off the capital at the end of the mortgage term.

Investment Trust
A company, quoted on the Stock Exchange which invests in other companies' shares.

ISA - Individual Savings Account
Tax-efficient savings plans which can hold cash, shares or life assurance, or a combination of all three elements, which were introduced in 1999 to replace TESSAs and PEPs.

J

Joint life
Joint life plans cover two (or more) people, usually a husband and wife. Benefits can be paid following the first death, or following the death of both.

K

Keyman insurance
This provides cover, in the short term, against the loss of profits a company is likely to suffer following the death of a key employee.

L

Liability
A debt, or amount of money, owed to others.

Listed company
A company whose shares are quoted on a recognised stock market.