The Pensions Glossary

Do you often find the world of pensions and pension advice a bit confusing? Not really sure what all the official sounding terms really mean? If so, you will definitely benefit from our basic glossary of terms associated with pensions found below.

Annuity Rates - Rate of return associated with a certain type of annuity. Suitability of fixed, variable or indexed to an investor depends on their personal circumstances.
Concurrency - is when you already contribute part of your salary into a private pension scheme and then decide to contribute towards a Stakeholder Pension scheme as well.

Endowment - a life assurance savings scheme. It allows you to pay in a regular sum of money, usually on a monthly basis, for a fixed period of time, whilst providing you with life assurance. On the termination of this policy, which is determined either by the end of the fixed term or the death of the policyholder, the scheme will pay you out a lump sum of money.

IFA – An Independent Financial Adviser who is obliged to give you clear, impartial pension advice.

ISA - Individual Savings Accounts were launched by the Government. They form part of the tax-free investment options which were introduced in order to replace PEPs and TESSAs. They will run for at least a further four years.

Occupational Pension - A private pension scheme which is set up by your employer and is also known as a works or company pension.  As well as a pension it also entitles you to life assurance benefits.

Pension - A pension is a sum of money which is paid on a regular basis, normally when you retire, as a means of income.

Pension Transfer – This is when you decide to transfer your pension provider.

Personal Pension Plan A Personal Pension Plan (otherwise known as PPP) is a way of saving for your retirement which is not dependent on your earnings but is instead usually linked to stocks and shares.

SIPP - Self-Invested Personal Pensions provide you with retirement and related benefits. It’s different from other pension schemes, however, as it allows you the accessibility and control to invest into your pension scheme more flexibly and you also have the possibility of income withdrawal. It does this by providing you with a choice of around 1,000 funds to pay into (in comparison with an average pension scheme which will give you a choice of around 20 or 30)  

Stakeholder Pension - stakeholder pensions are aimed at employees on low to middle incomes (between £10,000 and 20,000 per annum) as a means of encouraging saving for retirement. They are cheaper and more flexible than Personal Pension Plans