Jargon Buster

AVCs are extra contributions you can pay in addition to the normal pension contributions you or your employer make. AVCs, give you the opportunity to increase the overall value of your pension fund at retirement. If you are in employment, you can also claim tax relief on your AVCs.

This is a fee you pay a financial services company for a service or product. It is mandatory that all regulated firms provide you with details of fees/charges before you buy a service or product.

AER is the amount of interest earned in a year. The AER is useful when comparing returns on a savings account as it shows how much is earned regardless of often interest is credited to an account.You may earn less than the AER because your money may not be invested for as long as a year

The APR is the annual rate of interest you will be charged on a loan. It takes account of all the costs involved over the term of the loan such as set up charges and interest rates.

The APRC is the annual rate of interest you will be charged on a mortgage. It will take into account all costs involved over the term of the mortgage. These include any set up charges along with the interest rate.

An annuity is a contract with a life insurance company that will pay you a guaranteed, regular pension income for the rest of your life in return for you paying them a lump sum at retirement. The amount of income you receive will depend on the size of the lump sum along with annuity rates, age, gender and health.

An Approved Retirement Fund is a personal retirement invested as a pension lump sum after retirement. An ARF gives you the ability to regularly withdraw income although you will be liable to income tax.

An AMRF  is similar to an ARF but you are limited to a 4% withdrawal of your capital per year. The remainder of the capital in the fund cannot be accessed until you reach age 75 or have a guaranteed income of at least €12,700.

This refers to a late payment or a payment after the event.

This is a large final payment which is due at the end of some hire purchase agreements. It is common among car finance agreements.

This is a statement giving details of your pension arrangement and is unusually sent out once a year.

This is a statement giving details of your pension arrangement and is unusually sent out once a year.

This is a unique identification code given to banks and is also referred to as a SWIFT code.

A Buy-Out-Bond was designed to give you the ability to transfer an employer’s pension scheme into an individual fund in your own name.

When you buy a bond, you are effectively lending money to the issuer. Some life insurance companies offer guaranteed bonds which provide either a guaranteed return of the investment amount at the end of the term along with a level of bonus. Bonds will have a specified timeframe such as 5 years.

The APRC is the annual rate of interest you will be charged on a mortgage. It will take into account all costs involved over the term of the mortgage. These include any set up charges along with the interest rate.

This is a government tax that you pay if you make a profit of more than €1,270 in any tax year from the sale of an asset. If you make a loss, you can subtract the amount of the loss from any amount that you owe in CGT.

This is a payment that a financial services company gives to an intermediary such as a broker.

This is insurance which pays out on the diagnosis of a specific critical illness covered by your policy.

Some occupational pension schemes have a death-in-service benefit which is an amount to be paid to your dependents should you die while still employed.

This refers to the length of time you must be out of work due to a sickness or disability before your income protection policy kicks in.

This is payment by some companies to their shareholders as a way of distributing some of the profits.

This is a life insurance policy that provides cover for two people and continues after the first person dies. It effectively pays out on each death.

A readily accessible amount set aside should you need it in the event of an emergency. Ideally it will cover living costs for 3-6 months.

Some policies will include an exit penalty or exist charge should you cash in before the specified maturity date.

This is someone who is authorized by the Central Bank to give advice on related financial services and products.

Someone who agrees to pay off a loan should the borrower fail to pay.

An insurance policy that pays should you become unable to work due to a sickness or injury. Often you will have the ability to receive up to 75% of your salary.

This is an insurance policy that covers two lives. It pays out only once on the death of the first life.

The ease or speed with which you can convert your investment into cash.

The number of years on your mortgage.

This is a situation where the market value of your property is less than the balance you owe on the mortgage.

This is a pension scheme set up by an employer to provide benefits for employees.

This is a policy taken out by those in non-pensionable employment with an insurance company.

This is a regular payment on certain investments and pension policies. These are usually fixed at a specific rate per month.

The amount you will receive should you cash in or cancel your insurance policy early.

Responsible for duties under pension legislation for that specific pension scheme. Often in an occupational pension scheme the employer will choose a person or company to act as a trustee and manage the pension plan.

This is when a fund manager measures and gives you an estimated value of your fund.