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| glossary of terms | ||||||||||||||||||||||||||
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| income money you receive | ||||||||||||||||||||||||||
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index-linked index-linking means that the value of the financial product or service (eg pension, savings certificate) is increased in line with an index (eg the Retail Price Index, or inflation). With some types of contents insurance the insurer works out how much you need to increase your cover by each year. |
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| instalments weekly or monthly repayments made to pay off goods bought on credit or to pay off a loan taken out to buy them. | ||||||||||||||||||||||||||
| instant access means you can get your money back immediately without having to wait for any notice period. | ||||||||||||||||||||||||||
| insurance (buildings/content) insurance taken out to cover the house itself (buildings insurance) or the things in the house (contents insurance). If something happens to the building or contents you may get a pay-out from the insurer. | ||||||||||||||||||||||||||
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insurance (car) by law you have to have insurance if you drive a car on public roads. The basic insurance everyone must have is 'third party' - this means that the insurer will pay out if you damage someone's property (eg their car) or cause them an injury in an accident.
You can pay additional premiums and have 'third party, fire and theft' - this means you are covered by the insurance if you damage someone else's property or cause an injury and also you will get a payout if your car is stolen or damaged by fire. Some people choose to pay extra and have 'fully comprehensive'. This means they are covered for any loss or damage to their own car as well as for damage to other people's property or injury to other people. |
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| interest the reward you get for lending your money to say, a bank or building society. Also, the cost you pay when you borrow money through a loan or credit agreement. | ||||||||||||||||||||||||||
| interest rate is the percentage that is paid on savings or loans. A savings account that was offering 8% would give you a better return than one that was offering 5%. Similarly borrowing money at 22.5% is going to cost more than borrowing at 18%. | ||||||||||||||||||||||||||
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investment financial products which typically involve some risk of losing your original money but give you the opportunity of better returns than you can get from savings. Rather than putting your money into a deposit account and getting the interest, you buy, for example, stock market-based investments, such as bonds, shares, unit trusts and so on. A lot of people have shares without realising it as many financial products are actually based on investments, for example, endowment mortgages and pensions. Other products spread the risk of investing in the stock market by putting your money in a range of different shares, for example, unit trusts.
The value of your investment will change over time as the stock market prices go up and down. |
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ISA means Individual Savings Account. You do not have to pay tax on the gains or income from an ISA. You may not have a mini-ISA and a maxi-ISA in the same tax year. You can pay an overall total of £7000 into ISAs each tax year. You can choose to put your money in up to three mini-ISAs or into one maxi-ISA each year. - maxi-ISA an account (or 'wrapper') in which you can hold a wide range of savings and investments products. These must include stocks and shares and may also include savings accounts and life insurance. You can put up to £3000 into the cash component of your maxi-ISA, up to £7000 into the stocks and shares component of your maxi-ISA and £1000 into the life insurance component of your maxi-ISA. However, you must not exceed the overall total of £7000 paid in any one tax year. - mini-ISA you can hold cash, or stocks and shares, or life insurance in mini-ISAs. You can have up to 3 mini-ISAs in any one tax year made up of three different types of holding. The maximum you can pay into a cash ISA is £3 000, in a stocks and shares ISA is £3000 and in a life insurance ISA is £1000. - mini-cash ISA a savings account that pays tax-free interest. You can save up to £3000 in a mini-cash ISA in any one tax year. |
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| issue on some plastic cards - the number of cards you have received from the card issuer ever since opening the account. | ||||||||||||||||||||||||||
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