Unit 2.2 Savings and Investment Products Flashcards
annual exempt amount
The annual tax-free allowance for capital gains tax
annuity
A financial product that pays a regular guaranteed income, in return for a lump sum paid to the product provider. It is used by people when they retire
assets
Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares
captial gains tax
A tax payable on the gain (profit) made when you sell or give away an asset, for example property or shares. Each person is allowed to make a certain level of profit before being taxed on it (see annual exempt amount).
capital growth
increase in the market value of an investment , over the amount the investor paid for it
capital sum
total amount borrows or saved/invested , before interest.
Cash ISA
account that pays interest tax-free on cash savings up to a certain level
children’s bond
Investment bond taken out by a legal guardian of a child under the age of 16. Investing between £25-£3000, investor is guaranteed interest at fixed rate for 5 years, after the bond matures. Guardian controls bond until child turns 16.
Commodity
goods that share the same characteristics wherever they are produced and whoever produces them. E.G. gold
collective investments
investment produces such as unit trusts that let many retail investors pool their money together
corporate bond
product that companies can use to borrow money over periods of time of 5 yrs +. Buyers can then sell bonds onto other investors. Bondholders do not own a share in company
corporation tax
tax levied on taxable profits of limited companies and some other organisations
deposit
sum of money placed by customer with financial services provider
diversification
spreading investments across a range of different products, funds or types of assets so as to reduce the potential impact of any doing particularly badly
endowment policy
insurance product that pays out a Lum sum after a specified term or if insured person. died before end of term. used for long term saving
final salary scheme
type of occupational pension that pays an income related to amount of last salary a individual earned before retirement. have been largely replaced by money purchase schemes
friendly society
mutual organisation that offers its members a wide range of financial products
gilt
bond issued by uk gov as way for gov to borrow money. Most are issues with a redemption date - date that gov agreed to buy back. b esteem issue and redemption date gilts can be traded
gov bond
bond issued by national gov - is a way for goc to borrow money.
hedge fund
organisation that takes in funds from investors such as pension schemes act. and invests funds to try get high return. High risk
HMRC
Her majestys revenue and customs - organisation that collect taxes on behalf of gov
income tax
tax paid on earnings from employment, self employment and interest on savings
index-linked
rising in line with inflation
isa
account that pays interest tax-free on savings up to certain level. Cash isa and stocks and shares isa, junior isa for under 18s
investment trust
collective investment, which operates as public limited company. investors buy shares in investment tryst, and trust then uses money from share issue to trade in stocks and shares
junior isa
long term savings account set up by parent/guardian for parents future, child can only access money when 18
