Naz Financial

A Personal Financial Blog from Naz Miller

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UFPLS stands for Uncrystallised Funds Pensions Lump Sum.
Since April 2015, from age 55 you can take all of a pension fund as a single or series of cash lump sums. The first 25% is tax free, with the remainder added to your income and taxed accordingly.

If you are physically present in the UK for 183 days in a tax year, then you will be deemed resident in the UK and taxable on your income and capital gains.

If you’re abroad only temporarily, or if you spend an average of three months a year in the UK for four years, you will be treated as ordinarily resident and therefore taxable. Please refer to HM Revenue & Customs for full details.

The above is based on my understanding of current legislation and HM Revenue & Customs’ practice, all of which is subject to change without notice. The impact of taxation (and any tax reliefs) depends on individual circumstances.

Generally, this is the valuation of a company final salary pension fund where the actuary perceives there are insufficient funds to support current liabilities.

Income received from sources such as interest on savings accounts, dividends from shares and bonds that has not been earned by working

A trust that pools together customers’ money, allowing them to increase their investment options, therefore potentially reducing the risk. Unit trusts issue units, unlike OEICs which issue shares.

Unit trusts generally have two prices: a bid price at which you sell and an offer price at which you buy. The difference between the two is referred to as a ‘bid offer spread’.

Unit trusts are overseen by an independent body called the trustees.

Where the value of the saver’s fund is linked to the value of the units of the fund it is invested in. The value is therefore directly dependent on the performance of the underlying asset.

Where the value of the saver’s fund is linked to the value of the units of the fund it is invested in. The value is therefore directly dependent on the performance of the underlying asset.

A loan that isn’t secured against your home or other asset you own. You agree to pay back the loan within a set period. The lender is taking a bigger risk than with a secured loan, so interest rates tend to be higher. Example: Credit card debt.

Bonds issued by the British Government.

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An investment approach that invests in shares believed to have been under-priced by the market.

Measure of how much an investment’s price is likely to fluctuate during a set period of time.

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A feature on a personal pension or life insurance plan that guarantees your contributions will be paid for a period, usually by the insurer, if you are ill or lose your job. It usually costs extra.

A security that entitles the holder to buy shares in the issuing company at a specific price and within a certain time frame. Warrants are freely transferable and traded on major exchanges. Their value will go up or down as the price of the shares to which they relate goes up or down.

Life assurance a customer pays for throughout the whole of their life that pays out when they die. On some whole-of-life policies, premiums stop at a certain age.

A document drawn up to administer an estate on death.

An amount that is added to a with-profits life assurance policy. It can be added within the term of the policy (regular) or at the end of a policy (final).

Essentially a fund made up of shares, property, cash and fixed interest securities, which usually carries a medium risk.
The products that use with-profits are typically regular and single premium savings plans and pensions. With-profits funds pool policyholders’ investments, and customers share in the company’s investment returns and other profits. These returns are smoothed to help reduce the volatility associated with direct equity investments.

An investment where regular premiums or a lump sum are paid into a with-profits fund made up of shares, property, cash, and fixed interest securities. With-profits policies are usually medium-risk investments that use a smoothing device, when determining any bonus additions that might apply, to provide some protection for the investor from ups and downs of the market.

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A measure of the return on an investment compared to the price paid for it. This is normally expressed as an annual percentage. There are several types of yields. Bonds for instance have a nominal yield, current yield and yield to maturity. Shares have a dividend yield and an earnings yield. Yield can refer to growth or income, while net yield refers to the yield after charges and other deductions have been made.

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A bond paying no interest but is bought at a lower price than its redemption value.

This means:
• that the rate of interest is 0%; or
• that the VAT rate is 0%. (But it could be raised from this level, if the Government wished to, without fresh legislation being needed.)
Zero−rate does not mean the same as exempt. If something is exempt from tax, no tax can be charged on it, unless the law is changed.

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.