A gift is a transfer of goods or property which is free of charge. There are limits to the value and number of gifts you can make without any immediate or future inheritance tax liability. Check with HMRC or a professional adviser.

Bonds issued by the British Government. Called Gilts as the original bond certificates were gilded around the edges.

Earnings before income tax and other deductions are taken.

Any income that a fund produces (e.g., interest and dividends) is reinvested back into the fund and is not liable for UK tax.

A payment into a pension savings plan, deducted from earnings before income tax is taken.

Guarantees that the annuity rate will always be at a certain minimum level.

The minimum pension that a company final salary pension scheme must provide in respect of contributions paid between April 1978 and April 1997, as a condition of contracting out of SERPS, the State Earnings Related Pension Scheme.

The same as Conventional Annuity (above).  It pays a regular, guaranteed income, usually for life. Your annual income can stay the same, increase each year by a fixed percentage or change each year in line with inflation.

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.