TOPIC 5 Flashcards
CTF (Child trust fund)
A long-term savings account only available to children born between 1 September 2002 and 2 January 2011. CTFs were set up by the government to encourage people to build up savings for their children. They have been replaced by junior ISAs.
CPI (Consumer price index)
One of the means the government uses to measure inflation. It is calculated by checking the price of a representative sample of goods on a monthly basis – this enables statisticians to measure how much prices are rising or falling.
FCA (Financial conduct authority)
One of the two main regulators of financial services in the UK (the other is the Prudential Regulation Authority).
FSCS (Financial services compensation scheme)
A compensation scheme that pays compensation to account holders of up to a certain amount per provider if the provider
goes into default.
ISA (individual savings account)
An account that pays interest tax-free on savings up to a certain level. There are two types of ISA: cash ISAs and stocks and
shares ISAs. Junior ISAs are available for people under 18.
Junior ISA
Long-term savings accounts set up by a parent or guardian specifically for the child’s future. The child can only access the money once they turn 18 years old.
NS&I (National Savings and
Investment)
A provider that is backed by the Treasury (the government department that manages the UK’s finances).
Notice account
An account for which the holder has to tell the provider in advance if they want to withdraw their money. If they do not
give the provider the required amount of notice, they lose interest in their savings.
Personal allowance
The amount that an individual can earn before they have to pay income tax.
Personal savings allowance
The amount of savings interest that can be earned before the saver pays tax. The amount of the allowance varies according to
how much other income the saver has earned in the tax year.
RPI (Retail prices index)
One of the ways the government measures inflation. It is calculated by checking the price of a representative sample of goods on a monthly basis but unlike CPI (see above), it also takes into account mortgage interest payments and other costs associated with home ownership.
Savings bonds
A savings product held for a fixed period, e.g two years. The holder can only make a limited number of withdrawals, or none
at all, during that period without incurring a penalty
Starting-rate band
An amount of savings that an individual can earn tax-free if their total income is less than the personal allowance.
Tax year
6 April - 5 April. The tax you owe is calculated from your income during this time period.
