Arrow Financial Services

Jargon Buster

Jargon Buster



Results for letter: A


ACCRUAL RATE

The rate at which your pension benefits build up as pensionable service is completed in a Final Salary Scheme.

AER (ANNUAL EQUIVALENT RATE)

The interest paid from current, deposit or savings accounts.

ANNUITY

A contract you buy from an insurance company, using a lump sum of money such as the proceeds of your pension fund, to guarantee you an annual income for life or for a period of time [e.g. ten years].

APR (ANNUAL PERCENTAGE RATE)

In relation to mortgages, APR represents the total annual cost of borrowing by taking into account all costs associated with the loan: for example, interest, legal and valuation fees. By law, all lenders must show the APR alongside their quoted interest rates, to allow borrowers to compare the true cost of borrowing between other lenders in the market place. In relation to borrowing money on a credit card or from a bank, or when you make any purchase on credit, APR is the interest rate at which you are charged over a full year on the balance you owe.

ARRANGEMENT FEES

A charge made by some providers to arrange your loan, to cover things like administration and management fees.

AVCs (ADDITIONAL VOLUNTARY CONTRIBUTIONS)

Extra payments you can make to your main occupational pension scheme, over and above your regular contributions, to boost your retirement benefits. AVCs can be paid either to your employer's scheme or to a separate arrangement. See also FSAVCs.

AUTO ENROLMENT

A new law means that every employer must automatically enrol workers into a workplace pension scheme if they are aged between 22 and State Pension age, earn more than £9,440 a year, and work in the UK. You may not see any changes if you’re already in a workplace pension scheme. Your workplace pension scheme will usually carry on as normal. But if your employer doesn’t make a contribution to your pension now, they will have to by law when they ‘automatically enrol’ every worker.

ASU (ACCIDENT, SICKNESS AND UNEMPLOYMENT COVER)

Payment protection insurance (also known as SHORT TERM INCOME PROTECTION) is a form of accident, sickness and unemployment cover.

APR

Short for annual percentage rate. The fee, or interest rate, you pay to borrow money expressed as a yearly percentage.

ADDITIONAL STATE PENSION

An extra payment made on top of the basic state pension to those who have made sufficient National Insurance contributions and have not opted out of the system (see Contracting out).

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