Glossary
Alternatively secured pension (ASP)
One of several ways to take benefits from your pension plan. The only alternative to an annuity that you can take after age 75.
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Annual management charge (AMC)
This charge is to pay for administering your plan now and in the future.
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Annuity
One of several ways to take the benefits from your pension plan. It’s also referred to as your pension. It gives you a fixed monthly or yearly income from the day you decide to take the benefits until you die.
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Attitude to risk
How you feel about taking risks with your investments.
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Basic rate of tax
The percentage of money paid in tax while earning in the basic rate tax band.
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Dependants
Husband, wife, civil partner, children or anyone else who relies on you financially.
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Fund
The name given to the place your money is held while invested in your pension. There are many different funds and you can choose one or a number to invest your money in.
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Fund manager
The person responsible for looking after the money in the fund and choosing where to invest it.
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Gross
the amount of money before any deductions are made.
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Higher rate taxpayer
Someone who pays tax at a higher rate because their earnings are in the higher rate tax band.
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Income drawdown
A way to receive a flexible income from your savings while they’re still invested in your pension. You can only use this until you’re 75, when you have to take an annuity or an ASP.
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Inflation
The effect increased prices have on your money’s buying power.
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Investment strategy
The plan/direction you follow to make the money you save grow.
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Lifetime allowance
The limit that applies to the total value of your pension savings that will benefit from tax relief. This is for all the registered pension plans you have in total.
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Non-protected rights (NPR)
Another name for the money that you and your employer pay into your pension plan (your contributions).
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PAYE
Pay As You Earn is the system your employer uses to take tax from your pay or pension.
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Phased retirement
A way to use some of the benefits from your pension plan to receive a regular income while leaving the rest invested in your plan.
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PRP
Protected rights payments are the money paid into your pension plan from contracting out of the state pension scheme.
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Single life annuity
An annuity or pension that’s paid to you and you alone.
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State pension age
The age that you’re eligible to receive your state pension.
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Tax-free lump sum
An amount that you can receive from your pension savings that’s free from tax.
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Tax relief
Money you get back from the government for making personal contributions into a pension plan.
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