Company pension scheme where the final pension an employee receives is linked to the size of final salary and the number of years of membership of the pension scheme. Also referred to as defined benefit pension schemes. 

There are 4 primary classes of financial adviser:

  1. tied advisers (working for one financial institution),
  2. multi-tied advisers (paid by more than one financial institution),
  3. whole of market advisers (working with all companies but only on a commission basis) and
  4. independent financial advisers. Independent Financial Advisers (IFAs) must offer their clients the option to pay for advice by fee rather than commission.

The FSCS is the UK’s statutory compensation scheme for customers of authorised financial services firms. The FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it.

Generally known as ‘bonds’.  These are loans issued by companies or governments to raise money. Bonds issued by companies are called corporate bonds, those issued by the UK government are called gilts and those issued by the US government are called treasury bonds. In effect, all bonds are IOUs that promise to pay a sum on a specified date and pay a fixed rate of interest along the way. Very low risk investments, generally.

A form of drawdown where you to take an unlimited amount of income or lump sums from a pension fund. This replaces flexible and capped drawdown, although existing capped drawdown plans are continuing.

A non-compulsory payment made by a member of a company pension scheme to boost their retirement benefits, yet separate the payments from their occupational fund. Payments are made into a separate FSAVC fund.

The financial services regulator in the UK.

Financial Times Stock Exchange Index . An index of the share prices of the largest companies (by market capitalisation) in the UK. 

FTSE 100 is the index of the top 100 companies.

FTSE All-Share is the index of all listed companies. There are other FTSE indices too.


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An individual employed by a company to manage money. It’s a fund manager’s role to buy shares or other assets that they believe will increase in value or provide a level of income, in line with the fund’s stated objectives.

A “fund of funds” (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities. Sometimes known as multi-manager investment, a fund of funds may be ‘fettered’, meaning that it invests only in funds managed by the same investment company, or ‘unfettered’, meaning that it may invest in other funds.

Monetary value of a fund, calculated by adding up the value of its underlying assets. For example, the price of units in a unit trust is calculated from the value of all its holdings divided by the number of units issued.

Glossary of Personal Financial Terms

AAA Rating

In short, AAA ratings (‘triple-A‘ ratings) are the highest credit rating available for an investment, such as a bond or company.

AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors.

Similarly, the AA+ rating is issued by S&P (Standard and Poor) and is similar to the Aa1 rating issued by Moody’s. It comes with very low credit risk and indicates the issuer has a strong capacity to repay.