P

PAYE - Pay As You Earn - Where income tax and National Insurance contributions are collected from your salary, before it is paid to you, by your employer and passed to the Inland Revenue.

Pension Forecast - A service provided by the Department of Social Security which tells you what your pension is worth.

Pensions Ombudsman - An independent arbitrator for pension disputes with statutory power to enforce his or her decisions.

PEP - Personal Equity Plan - Tax-efficient savings plans replaced by ISAs in 1999. You can no longer invest in a new PEP but you can still transfer your existing PEP into an ISA.

Personal Pension Scheme - A pension scheme for those who are self-employed, or, if employed, are not members of an occupational scheme and so make their own pension provision.

Phased Retirement - The facility to use small segments of your pension to buy annuities as and when you need more income rather than buying one annuity annually with your whole fund.

PHI - Permanent Health Insurance - Insurance that pays a level of income in the event of long term sickness or disability

PLC - Public Limited Company - Any company with a share capital of at least a fixed amount.

PMI - Private Medical Insurance - Insurance which will pay for the cost of medical treatment in accordance with the policy cover.

Portfolio - A collection of shares owned by an investor.

Price/Earnings Ratio - Calculated by dividing the market price of a company's ordinary shares by its earning-per-share figure as an indicator of the company's performance potential.

Q

Qualifying (life policy) - a type of insurance policy that can have tax benefits.

Quartile - Most UK funds are grouped into sectors and each sector is divided into four quartiles with the best performing funds being in the top quartile.

R

Return - The amount by which the value of your investment increases.

Rights Issue - New shares sold by a company to raise capital.

Risk - Refers to the fact that the value of your savings and investments can fall as well as rise.

RPI - Retail Price Index - The official measure of inflation calculated by weighting the costs of goods and services to approximate a typical family spending pattern.