EXPLANATION OF FINANCIAL TERMS
Fixed interest rate
Applies to mortgages, where
borrowers are locked into a certain interest rate for a specified time. The expression
may also apply to savings accounts. Most savings accounts have variable rates
which means they will go up and down over time in line with the Bank of England
changes to base rate.
Check this definition carefully
with your mortgage lender. Some lenders allow underpayment, overpayment and then
a reversal of the overpayment. Some will not allow a withdrawal of the overpayment
and others will allow only an overpayment and prevent you from underpaying.
A life and sickness insurer
set up and owned by its members. Similar to a mutually owned insurer.
The Financial Services Authority
authorises more than 23,000 firms to conduct investment business in the UK. Most
regulation is carried out by a number of specialist bodies, recognised by the
Financial Services Authority. The FSA recognises three SROs, or Self Regulatory
Organisations which have the power to authorise firms to conduct investment business.
The FSA also monitors the professions via the Recognised Professional Bodies and
looks after six Recognised Investment Exchanges and two Recognised Clearing Houses.
Like AVCs they are classed
as additional voluntary contributions to a pension scheme. The FS indicates free-standing,
industry jargon for a product offered not by an employer but by an outside provider.
Charges are usually higher than for a company AVC scheme.
A number of different stock
market indices are used in Britain to measure the stockmarket. The FTSE 100 covers
the top 100 shares in Britain and is used by tracker funds to target performance.
The FTSE All Share index tends to be used by actuaries to measure pension fund