Interest rate that London banks charge when lending money to one another over a short period of time, often overnight. LIBOR is often used as a benchmark when setting other short term interest rates.

Other than qualified solicitors, these are the only people allowed to do conveyancing and charge a fee for it.

An assurance policy that pays out a lump sum or instalments on the death of the life assured.

There is no limit on how big your pension fund can grow to. However, you’ll have an allowance of the maximum amount of tax-relief benefits you can build up over your lifetime. If you think you are affected by this limit, visit the HMRC website or get professional advice.

A loan secured against the value of your property that can be converted into a cash lump sum or income, without the need to move. You can also do this using a home reversion scheme. These types of plans are sometimes referred to as equity release.

This is how quickly an asset, such as property, shares or bonds, can be sold and turned into cash. Liquid assets are easier to convert to cash than illiquid ones.

The ratio between the value of an asset (such as property) to the value of the loan that will finance the purchase of that asset. LTV tells the lender if potential losses due to non-payment may be recouped by selling the asset.

An investment vehicle designed to cover the costs of care in old age. May be used to cover residential home costs as well as expenses incurred when care takes place at home.

If you earn less than this, you pay no National Insurance contributions.

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.