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Jargon Buster

Jargon Buster



Results for letter: C


CAPITAL GAINS TAX

The tax payable on profits made on the sale of assets or property other than your home.

CAPITAL REPAYMENT MORTGAGE

A mortgage in which monthly repayments consist of instalments of capital [the amount of money you have borrowed] as well as interest.

CAPPED RATE MORTGAGE

The interest rate charged by the lender never rises above a specified rate [the “capped rate”]. If the variable rate drops below the capped rate, you pay the variable rate.

CAT STANDARDS

Stands for [reasonable] Charges or Cost, [easy] Access and [fair] Terms. The CAT mark is awarded by the government to ISA’s and mortgages which meet these standards.

CHAPS (CLEARING HOUSE AUTOMATED PAYMENT SYSTEM)

Provides same day transfer from one bank account to another.

CHARGE

With reference to house buying, the means by which lenders in England, Wales and Northern Ireland enforce their rights to a property. The charge is recorded at the land registry. A primary mortgage will normally be secured by a first charge.

COMMISSION

One method by which independent financial advisors or salespeople are paid by an insurance company for placing business with them.

COMPLETION

The point at which the legal formalities of a property purchase or a mortgage are finalised and the funds released by the lender.

CORPORATE BOND

A form of investment offered by a company in order to raise capital, in which the lump sum is repaid with interest at maturity. Corporate bonds can be bought and sold on the stock market.

CORPORATION TAX

A tax applying to limited liability companies only. It is charged on the company’s profits.

CREDIT CHECK

An enquiry made on the credit history of an applicant, normally by reference to one of the major credit agencies.

CRITICAL ILLNESS INSURANCE

Pays you a lump sum if you are found to suffer from one of a range of designated illnesses [normally including cancer, heart attack and stroke among others]. When an illness requires you to stop working for some time, having insurance means worries are eased. So normal practice is to have enough insurance to cover your mortgage and provide income for a year or two if your savings or other insurance will not provide this.

COLLECTIVES

The definition of a collective investment scheme can be found in section 235 of the Financial Services and Markets Act 2000 (FSMA).

CRITICAL ILLNESS PROTECTION

Critical illness insurance or critical illness cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.

CONTRACTING OUT

Some people with workplace defined benefit pensions paid lower levels of National Insurance, while some with personal pensions opted to have National Insurance contributions paid into private scheme. In return, both groups gave up their entitlement to the additional state pension for the years the were contracted out.

CONTRACTING IN/OUT

Used to be a widely used process by which you could elect to stay in or opt out of the State Second Pension [S2P], formerly known as the State Earnings Related Pension Scheme [SERPS].

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