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2
adult basic education, the jargon which is used on
organisations are working a daily basis in relation to
together to help tackle all aspects of the money
financial literacy and to business. This resource
address the issue of access will also give guidance to
to financial products and management and staff who
services for those with work in the financial services
literacy and numeracy sector, money advisers, the
difficulties. Government, regulators
and utility companies in
This A-Z Pocket Guide to explaining phrases used
Understanding Financial by them.
Terms is just one of the
achievements of EBS’s Financial decisions are
partnership with NALA. among the most important
Having launched it originally that are made by people
in 2004 we have now during their lifetime and it is
updated it with modern our collective responsibility
terminology to meet with to provide better tools to
the increasing demand for assist people in making
the book. The guide is an those decisions. We hope
important resource that you enjoy and learn from
will help to create a much this book.
greater understanding of
the dense and obscure
3
Aa Accurate figure
An exact reading from a
meter to record how much
Accidental damage
gas or electricity a person
Damage to a person’s
has used
possessions by accident,
such as spilling paint on a Actuary
carpet, that is covered An expert on pension
by some home scheme assets and debts,
insurance policies life expectancy and risk for
Aa
insurance purposes
Account
A record of spending and Acquisition
income, provided by a The buying of one company
bank, post office or by another; also known as
building society a takeover
Accounting date Administration fee
The last date of the period An amount you pay for the
covered by an organisation’s time it takes staff to make
annual accounts changes to your financial
product or service
Accumulation date
The date when income is AVC
reinvested in a unit trust, Additional Voluntary
instead of being paid out Contribution – extra money
to investors that people in work related
pension schemes can pay to
Accumulation unit
increase their pension benefits
A type of unit of income that
a company reinvests in a
unit trust instead of paying it
out immediately to investors
4
Affinity card Annual
A credit card that allows Every year
a person to support an
organisation such as a
Annual cover
An insurance policy that a
charity; every time a
person must renew every
person uses the card to buy
year, such as health or
something, the credit card
car insurance
company makes a small
donation to the organisation Annual management
charge
Aa
After tax
An amount of money that a A charge or fee that a
person is left with after they person must pay each
have paid tax year to the manager of an
insurance policy, investment
Agent or pension fund, based on
A person who deals with a the value of a person’s fund
range of suppliers from
which it can issue a Annual service
recommendation to a client A check made once a
year on a piece of
All risks equipment to make sure
A home insurance policy it is working properly
that covers a person’s
possessions even if they take Annuity
them outside their home A regular amount paid
out to somebody from an
Allocation rate investment that is linked to
A percentage of a person’s a managed fund
money that has been
invested in a fund; the Applicant
remainder is spent A person who applies
on charges for something
5
APR shareholders’ rights and
Annual Percentage Rate – a the directors’ powers
percentage to show the
Asset
amount of interest and other
Something owned
fees a person pays each year
to receive a loan Asset management
A service from a financial
ARF adviser to spread a person’s
Approved Retirement
investment between a
Fund – an investment plan
number of assets, such
Aa
6
Audit
An independent examination Bb
of an organisation’s records
Balance
and accounts to make
An amount of money, shown
sure that they show a fair,
on a person’s statement,
accurate and legal reflection
that they have in their
of the financial position
account or that they owe
of the company at the
at any time
accounting date
Balance brought
Bb
Auditor’s report
A report by an independent
forward
An amount shown on a
person or firm on
person’s last statement
an organisation’s
that is brought forward to
financial records
the next statement, either
Authorised share to show money saved or
capital money owed
The highest amount of share
Balance transfer
capital that a company
An amount a person owes
can issue, as set out by the
on one credit or store card
company’s memorandum
that they can switch to
of association
another credit card
Available credit Balance sheet
The difference between a
A summary of a company’s
person’s credit limit and the
assets (what a company
amount of money they have
owns) and liabilities (debts
already borrowed or spent
a company owes) at a
on their credit card
point in time
7
Balloon payment Barter
A higher than normal final A way of paying for things
payment for a loan in return by exchanging goods and
for lower regular repayments services instead of money
Bank Basic bank account
An organisation that invests A service from a bank or
and lends money building society that only
lets a person spend what
Bank identifier code they have in their account so
A bank’s unique code, which
Bb
8
Benefit-in-kind unit if they cash them in
A ‘perk’ of a job, such
Bond
as a company car, gym
A written promise made by
membership or health
governments and companies
insurance, that a company
to repay any money
gives to its employees or
borrowed, with interest, on
directors and that may
a certain date in the future
be subject to tax
Bonus issue
Bequest An offer of free shares to
Bb
Something, usually property,
a company’s shareholders,
given in a will
related to the number of
BIC shares they already have
Bank Identifier Code – a
Book value
unique address which,
The value of a fixed asset,
in telecommunication
such as a building or
messages, identifies
machine, after depreciation,
precisely the financial
as recorded in an
institutions involved in
organisation’s accounts
financial transactions
Books of account
Bid/offer spread Books that a business must
An initial investment charge
keep to record its financial
that refers to the difference
transactions accurately
between the buying and
selling price of a unit on the Booking fee
stock market on any An amount a person pays
given day to book something, for
example a concert or plane
Bid price ticket, to cover a company’s
The price that an investor in
administrative costs
a unit trust can get for each
9
Borrow Budget
Get money that will be A plan of spending over
paid back a certain length of time,
based on how much money
Bounced cheque a person has
A cheque that the bank
refuses to pay out because Budget deficit
the person who wrote A gap that occurs when a
the cheque does not have body, often a government,
enough money in their plans to spend more money
Bb
Cc
A period of time that starts makes if it sells a long-term
on the first day of the month asset, such as a building, for
and ends on the last day, as more than it cost
opposed to starting in the Capital gains tax
middle of one month and A tax on gifts over a certain
ending in the middle of value or on a capital gain.
the next
Capital guarantee
Cancellation rights An investment that
A person’s or company’s guarantees that, at the end
right to cancel a contract of the agreed term, a person
Capital will get back at least the
An amount of money a amount they invested
person saves, invests or Capped charge
borrows, before interest The most that a pension
or loss provider can charge a
Capital charge person for managing
A charge that a unit trust their pension, usually a
manager takes out of the percentage of the value of
fund’s capital rather a person’s fund
11
Car insurance their balance or print out a
Insurance that a person mini-statement
needs before driving a
Cash inflow
vehicle, which, depending
The amount of money
on the type of insurance,
coming into a business
pays them a certain amount
if their car is stolen and pays Cash outflow
a sum towards repairs if the The amount of money
car is damaged due to an leaving a business
accident or fire
Cc
Cashflow
Cash advance A record of all the money
A cash withdrawal using a coming in minus all the
credit card, for which a payments as they are
person may pay a fee as well made, measured over a
as interest particular time
Cashback Caveat emptor
A service with a debit card A Latin term, ‘buyer
that allows a person to beware’, to warn people to
get money straight from understand the meaning
their account when a shop of a sales contract before
assistant swipes their card to agreeing to it
pay for goods and services
Celtic Tiger
Cashcard A term used to describe the
Also known as an ATM period of rapid economic
card – a plastic card that a growth in Ireland
person can use only at cash
machines with a personal Certificate of insurance
identification number (PIN) A document that proves that
to withdraw cash, check a person is insured
12
Charges of money on a cheque (up to
Fees and interest that a certain limit) will be paid
a person must pay, for whether or not there
example when they borrow is enough money in
money or buy on credit the account
Cc
can buy goods from the adult, or a child up to the
store on credit age of 22 who is in full-
time education by day at a
Chargeable asset recognised school, college
An asset on which a person or university
may need to pay capital
gains tax if they sell or *Child Dependant
dispose of it Increase
An additional amount paid
Cheque to a person receiving certain
A written order, addressed
social welfare payments to
to a bank, instructing
cover the cost of supporting
the bank to pay an amount
a child dependant
of money to the person or
organisation named on
the cheque Cirrus
A brand of an international
Cheque guarantee debit card network,
card run by the MasterCard
A plastic card from a bank organisation, that lets a
or building society that person access their money
guarantees that the amount at ATM machines abroad
13
Claim its employees
An action to get
Compensation
compensation based on an
An amount of money paid
existing insurance policy
to make up for an injury,
Clearing damage or loss
The time it takes for a
Compound annual
bank or building society to
transfer money from one return (CAR)
account to another, say The interest rate if interest
on savings is added to
Cc
14
Contents insurance Unemployment Benefit and
Insurance that covers damage Maternity Benefit
to and theft of a person’s
Conversion rate
possessions in their home
Also known as the exchange
Contract rate – a changing rate at
An agreement between which a person can change
two or more parties, one currency for another, for
which is usually written example €1 for $1.20
and is binding on
Conveyance
Cc
everyone concerned
A legal term to describe
Contract of service selling or giving property to
A contract usually agreed another person or group
between an employee and
Cooling-off period
their employer
A period after a person signs
Contract for service a contract, but before the
A contract usually agreed contract becomes binding,
between an organisation in which the person can
and another organisation or change their mind about
self-employed person, such the contract without
as a consultant or any penalty
a contractor
Counterfeit
*Contributory payment Something that a person
Known as social insurance, a forges or copies with
social welfare payment that the aim of deceiving
depends on the number of another person
pay-related social insurance
(PRSI) contributions a person
has made in a certain
period; examples include
15
Coupon and how much they need to
A piece of paper that allows pay back to their credit
a person to get a product card company
for a lower price up to a
Credit crunch
certain date
A sudden drop in the general
Cover availability of loans or a
The protection offered by an sudden increase in the cost of
insurance policy, involving borrowing from banks; also
payment for any event or known as a credit squeeze
Cc
accident in relation to a
Credit history
person’s home, car or health
A history of how well a
Credit person has been able to
Money that a bank, building repay debt; a poor credit
society or a credit card history means that they may
company has lent a person find it difficult to take
to buy goods or services out a loan
16
Credit reference members and
agency encourages savings
An organisation that holds Credited
information about a person A term to describe a person’s
and their past record of account when money has
paying back their debts, been paid into it
to which lenders may refer
before they agree to give a Creditor
loan A person or company who is
owed money
Cc
Credit risk
The risk that a person might *Credits
not repay a loan or credit PRSI contributions that
are recorded for a person
Credit scoring when they are absent from
A system used by a lender to work due to illness and
give a score to a potential cannot pay their own PRSI;
borrower depending on the they help keep a person’s
answers they give to a series social insurance record up
of questions; the higher the to-date to help them get
score the lower the risk that social welfare payments and
the person will not repay benefits in the future
their loan
Critical illness
Credit transfer insurance
A way of automatically
Insurance that pays a lump
moving money from one
sum, covers a person’s
bank account to another
mortgage or makes regular
Credit union payments if a person cannot
A non-profit organisation work due to a serious illness
that provides loans to its
17
Currency
The type of money used Dd
in a particular country, for
Data Protection Act
example the euro or the dollar
A law that protects
Current account a person’s personal
A bank or building society information and
account that lets a person prevents companies from
keep their money secure, sharing it with other
but still write cheques companies without the
Dd
18
to withdraw money from Defined contribution
an ATM pension scheme
Debt A type of pension scheme
Money owed to another to which a person makes
person or to a company payments each month
and that pays out an
Debt consolidation amount related to how
Taking out a single loan to much the person has
pay off a number of smaller, invested and how well the
individual loans fund has performed
Dd
Debtor Delete as applicable
A person who owes money Cross out anything that does
not apply
Declining term policy
A policy that protects Demutualise
a person’s mortgage Converting a building
payments and ends as soon society from an organisation
as they have paid off owned by its members
their mortgage or customers (known as a
‘mutual’) to a profit-making
Deeds
company that distributes
Documents that confirm
profits to its shareholders
that a person owns a
particular property, usually Dependant
given as security for Somebody who depends on
mortgages another person for financial
support, such as a child or
Default
an elderly relative
A failure to pay a debt
on time
19
Deposit due to wear and tear, age
Initial amount of money and whether it is going out
that a person pays to get of date, as recorded in an
something, for example organisation’s
a house or an electrical financial records
appliance bought through
Depression
hire purchase
In economic terms, a severe
Deposit account and long-term downturn in
A type of savings account the economy that is marked
Dd
20
savings’ account with Divest
another financial institution, Selling off, usually in relation
using electronic fund to the parts of a company
transfer (EFT) that are not performing well
or no longer fit in with the
Discount
company’s wider plans
Money that is taken off the
price of something Dividend
Money that a company pays
Discounted rate
to its shareholders from
mortgage
Dd
its profits
A type of mortgage, usually
offered to new customers, Dormant account
in which the interest rate is An account that is no
reduced for a fixed period longer used
of time
Drawee
Disposable income The person (or bank) who is
Income available after a expected to pay a cheque
person pays tax, loans and or draft when it is presented
buys basic goods for payment
and services
Drawer
Dissolve The person or organisation
Formally breaking up an that has written a cheque
organisation or institution
Duress
Dissolution A threat or pressure put on
The act of formally breaking somebody to do something
up an organisation
or institution
Duty
A tax charged by the
government
21
Ee Endowment policy
A savings plan that pays
out a lump sum on a
Earnings cap
certain date in the future
A limit on the contributions
or when a person dies,
that can be paid into and
whichever happens sooner,
the benefits that can be paid
and is usually used to pay off
out by tax-approved
a large loan, such
pension schemes
as a mortgage
ECB
Ee
22
Ethical investment that is not covered by an
policy insurance policy
A plan to make sure that Executor
money is invested in A person who carries out the
desirable activities instructions in a will
Euro Exempt
Official currency of Austria, Free from a duty or condition
Belgium, Cyprus, Finland,
France, Germany, Greece, Exit charge
Ff
Ireland, Italy, Luxembourg, A charge that a person
Malta, Netherlands, Portugal, pays if they cash in an
Slovakia, Slovenia and Spain investment before its end
(as at January 2009) date or before it matures
Excess Expenditure
The first sum of money that Money that a person spends
an insured person must pay
Expiry date
for any loss, damage or injury
The last date a person can use
before an insurance company
something, such as a credit card
will make any payments
Exchange rate
A changing rate at which Ff
a person can change one Fat cat
country’s currency for A wealthy person
another’s, for example €1
for $1.20 Fee
A sum of money a person
Exclusion pays for a service, such as
An item, event or health getting a loan or taking out
condition, for example, an insurance policy
23
Final demand Financial situation
The last demand for payment A term to describe a
before a company cuts off a person’s income and
service or begins legal action spending, including any
loans and any savings they
Final dividend have for the future
The amount of payment
to shareholders declared Financial statement
by directors of a company A company’s statement
when the company has that includes the annual
Ff
Gg
pays a set amount of money, or giving up something
no matter how interest rates
go up or down Fund
Money set aside for some
Flotation purpose
A company’s decision to
allow anyone to buy and sell
its shares through the Gg
stock exchange
GDP
Floating charge Gross Domestic Product –
A security created by the value of all goods and
a company over its changing services produced and sold
assets, such as stock and inside one country
unpaid sums from debtors,
Goodwill
in return for a loan; if the
An intangible business
company does not make the
asset based on a company’s
repayments when they are
reputation from the
due, the assets are
confidence of repeat
used to pay it
customers and connections
25
GNP Guarantor
Gross National Product – the A person who agrees to pay
value of goods and services the loan if the person who
produced by a country, received the loan fails to pay
including those sold abroad
Gross
The total amount, before
Hh
fees or taxes are taken off Hedge fund
A private investment fund
Gross interest
Hh
26
Honouring a cheque certain conditions
Paying out the amount
IMF
stated on a cheque, as long
International Monetary
as there is enough money to
Fund – an international
cover it in a person’s account
organisation that oversees
Honouring an the global financial system
agreement to keep international
Sticking to both sides of currencies stable and offers
an agreement temporary loans to
developing countries
Ii
Ii Indemnity
A promise to compensate
IBAN someone else for loss or
International Bank Account damage or protection from
Number - an international legal responsibility from a
standard for identifying person’s actions
bank accounts across
national borders
In credit
A situation where money is
Identity available in an account
Who a person is, shown by
documents such as their
Income
Money coming in, such as
passport, driving licence or
wages and social
birth certificate
welfare payments
Illustrations
In financial terms, an
Income tax
A tax on personal or
estimate of the value of
business income
a person’s savings and
investments at some point
in the future, based on
27
Indemnify goods and services to allow
Protect or insure somebody for the effects of inflation
against being sued for
Index-linking
their actions
Linking the value of a
Indemnity bond financial product, such as a
Insurance requested by a pension, to the Consumer
mortgage lender if a person Price Index so that the value
doesn’t pay their mortgage of the fund keeps up
on time, to cover the with inflation
difference between what
Ii
Inflation
the person owes and what
An increase in prices, which
their house is worth
decreases the purchasing
Independent agent power of money
Somebody who deals with
Insolvent
the widest possible range
A person’s or organisation’s
of suppliers from which it
position when they cannot
can make recommendations
pay debts when they are
to a client
due for repayment
Independent financial Instalment
adviser A regular repayment for
Somebody who advises on goods bought on credit or
life insurance, pensions and to pay back a loan
investments, who is not
employed by a particular Instant access
company selling such services Ability to get money
straightaway without having
Indexation to give notice to a bank or
A way of changing the value building society
of savings and the cost of
28
Insurance company to make sure they
A contract between a person are covered
and a company to buy a plan
Insurance quotation
that covers them against loss
The price given by an
or damage, for example to a
insurance company for
car, a home or their health
protecting against particular
Insurance broker loss or damage
A self-employed person
Intangible assets
who can offer their client
Assets that cannot be
insurance policies of five or
Ii
touched, such as goodwill
more insurance companies
and patent rights
Insurance company Interest
Company that provides
A fee a person receives if
insurance policies
they save money, or pay if
Insurance cover they borrow money, usually
Protection against certain expressed as a percentage
events as outlined in an of the savings or the loan
insurance contract
Interest rate
Insurance policy The percentage that a
A document of the contract person receives on their
made by an insurance savings or pays on their loan
company with a person
Interest-free credit
whose property or health
A loan, whether from a
is insured
lending agency or a credit
Insurance premium card company, on which a
Money a person pays person pays no interest for a
regularly to an insurance fixed period
29
Interest-only mortgage Investment trust
A mortgage where a person A company that is quoted
only pays back the interest on the stock exchange and
to the bank or building invests in other companies
society for a period of time
Issued share capital
Interim dividend Shares that a company has
A dividend that is paid to given to its shareholders,
shareholders during the which equal some of the
financial year, depending on value of the company
Jj
30
Ll Liabilities
Debts that a person or
organisation owes
Land Registry
A central list of the owners Lien
of land and buildings A right to keep something
owned by someone who
Laser card
owes a debt, until the
The primary debit card
person has repaid the debt
system used in the Republic
of Ireland. Life insurance
Ll
Insurance that pays out
Legacy
a lump sum to a person’s
Money or property left
family if they die, usually
in a will
taken out when a person
Legal action obtains a mortgage so that
An action that can involve the remaining mortgage
solicitors and possibly court repayments are covered
proceedings to make sure a
person upholds a contract or
Limited company
A company that limits how
to punish them if they don’t
much its shareholders will
Legal status have to pay if the company
A reference to whether a is wound up
person is an Irish citizen or
has a right to work in Ireland
Limited liability
A statement of the
Levy maximum amount a
Obtaining money through company’s shareholders
a legal process; by sale of would have to pay if the
property or through taxation company was wound up
31
Liquidity because of a specific factor,
The ability to convert an such as the age of a driver or
asset to cash easily and if a person is a smoker
quickly with little or no loss
Lodgement slip
of value
A form that a person must
Liquidation fill in when they pay money
A situation that arises when into their account, when
a company is wound up paying by cash or cheque
because it is unable to pay
Loyalty card
Ll
32
Mm issued ordinary shares is
multiplied by their
market price
Maintenance
Maintenance is the payment MasterCard
of regular financial support An international card
to a partner or previous payments organisation
partner for living expenses owned by banks worldwide,
and/or child care which provides credit cards
Managed fund Maturity
Mm
A fund made up of A situation that arises
investments in shares, bonds when an investment, such
or cash from which investors as a term deposit, or a life
receive ‘units’ related to insurance policy comes
their investment to an end
Management expenses Maximum withdrawal
Internal expenses of an A limit on the amount
insurer to obtain and service of money a person can
insurance business, usually withdraw from an ATM
partly passed to machine each day,
a policyholder depending on the amount of
money in their account
Mandate
An instruction by a customer *Means
to a bank to operate the Any savings or income or any
customer’s account a property that would bring in
certain way money
Market capitalisation
The value of a company
when the number of its
33
*Means test Mortgage adviser
A way of working out the A person who advises
value of a person’s means others on the best type of
by reference to the value mortgage to choose
of their investments and
property and to any money in
Mortgage broker
Somebody who assesses a
a savings account or current
person’s mortgage needs,
account and any cash-in-hand
then finds and advises on a
Memorandum suitable mortgage lender
Mm
A document containing
details of a company’s name,
Mortgage arrears
Mortgage payments that
purposes, share capital and
a person owes after
how much the shareholders
they are due
would need to pay if the
company is wound up Mortgage protection
An insurance policy required
Minimum payment
for mortgage-holders
The lowest amount that
under 50 to ensure that the
a credit or store card
mortgage will be paid off in
company will allow a person
full if a person dies
to repay each month
to clear their debt Mortgage repayment
A monthly payment to repay
Monthly instalment
a loan for a property
A payment each month,
usually to pay back a loan Mortgage statement
A report that details
Mortgage
payments, charges and
A loan to buy a property;
the remaining balance
if it is not paid back, the
of a mortgage
lending agency can take
over the property
34
Multi-trip cover other amounts have
A type of travel insurance been deducted
that covers a number of
Net book value
trips abroad during a certain
The value of an asset, as
period, usually a year
recorded in the books of
Mutual organisation account, after depreciation
A membership organisation, for wear and tear
such as a building society, that
Net income
is owned by its depositors and
A person’s income each week,
Nn
loan account holders
month or year after tax,
PRSI, union subscriptions or
Nn pensions have been deducted
35
No claims bonus Non-profit making body
A reduction in an insurance An organisation, usually
premium, usually expressed a charity or public sector
as a percentage of the total agency, that does not set
premium, that occurs if a out to make a profit
person doesn’t claim on
their insurance policy over a
Notice
A period of time between
period of time
a person telling a bank
*Non-contributory or building society that
Oo
36
Ombudsman something that should have
A person who provides occurred earlier but has not
a free and independent
Overheads
service for resolving disputes
The costs of running a
with financial services
business, such as rent,
companies
heat and light, advertising
‘Open driving’ and salaries
Motor insurance that allows
anybody over a certain age
Pp
Pp
to drive a person’s car
Operating profit P45
The profit from a company’s A document that an
main trading activity employee receives when
they leave a job, showing
Outstanding their total pay up to the date
instalment they leave as well as the tax
A repayment that has not and PRSI that their employer
yet been made has deducted
Overdraft P60
A facility from a bank or A document that an
building society that lets a employee receives at the end
person access more money of every year, which shows
than they have in their their salary for the past year
account, for a charge and the tax and PRSI that
their employer has deducted;
Overdue needed if a person wants
Something that a person does to apply for certain social
not pay when it is due or welfare payments
37
Paid-up share capital not sticking to the terms of
The money that shareholders a contract; might involve
have paid for the shares a extra charges or interest
company has given them
Penalty-free transfer
PAYE An option to transfer
Pay As You Earn – tax paid savings, such as a pension,
when an employer deducts to another scheme or
tax from their employee different provider without
every time they pay them having to pay any charges
Pp
Payee Pension
The person who receives An income a person
a payment receives from the State
or a private company, or
Payment protection both, after they retire; if a
plan (policy) person has their own private
A plan that makes loan pension, they cannot use
repayments if a person’s any of their pension fund
income drops because of until they reach a minimum
unemployment or sickness age, usually 50
Payment received Pension calculation
A sum of money that a table
credit card company A table that shows the level
or lending agency has of pension a person can
received, which is shown on expect when they retire
a person’s statement
Pension contribution
Penalty A payment, usually every
A punishment for not month or every three months,
obeying a law or rule or into a pension scheme
38
Pension benefits Per annum
Payments and lump sums Each year
that a person receives from
their private pension
Percentage point
The difference between
Pensionable age two percentages, for
The age a person must reach example a quarter or half
to be entitled to claim their of a percentage point in
state pension the case of changing
ECB interest rates
Pension deduction
Pp
An amount that an Personal allowance
employer takes straight The amount of income on
from an employee’s pay which a person does not
and uses to pay into a pay tax, depending on their
pension plan, shown on an age and whether they are
employee’s pay slip married or have children
Pension fund Personal loan
A fund to pay A loan taken out by a person
employees’ pensions to pay for anything they want
Pension mortgage Personal pension
A mortgage that will A pension plan, not tied to a
be repaid out of the lump particular employment, that
sum from a pension a person can keep going
even if they change job
Pension provider
A company that Pet insurance
provides pensions An insurance policy that
covers the cost of vets’ bills
39
PIN regularly for insurance
Personal Identification or pension
Number – a four-digit
Priority debt
number that a person must
A debt that is more
keep secret and use to get
important than others,
money with an ATM card at
such as a mortgage or an
an ATM machine
overdue electricity bill, that
Policy entitles certain lenders and
A plan, for savings or companies to take serious
Pp
40
Promissory note for certain social welfare
A written promise to pay payments and benefits
an amount of money to
Public liability
someone at a given time or
A type of insurance cover
on demand
to protect people and
Prospectus businesses from claims made
A document from a public against them by members of
company that wishes to sell the public
shares to the public, giving
PLC
Pp
details of the company’s
Public limited company
past performance and its
– a company, quoted on
plans for the future
the stock market, whose
PRSA shareholders only have to
Personal Retirement Savings pay a certain amount if the
Account – a savings account company is wound up
that a person pays into each
Purchasing power
month straight from their
The ability of a person’s
salary to build up their
money to buy goods and
pension; if an employer
services, affected by the
does not already offer an
cost of those goods and
occupational pension, they
services
must allow their employees
set up their own PRSA
PRSI
Pay Related Social Insurance
– a payment from employers
and most employees,
depending on their earnings
and type of work, that pays
41
Qq amount a person has paid,
usually in relation to tax
*Qualified adult Recapitalise
A spouse or partner of Funding a business so
a person applying for a that it can continue its
social welfare payment or, activities and expand
if the person is widowed,
separated or divorced, a Receipt
person aged 16 or over who A document to confirm
that money has
Qq
Rr its debts
Recession
Rate relief A major fall in economic
A reduction on all or part of activity in a country, such
a business’ bills for utilities as investing, creating jobs
such as gas or electricity or buying goods and
Rebate services, over an extended
A return of part of an period of time
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Redemption Repayment
Paying off all the An amount due to be paid
money borrowed under on money borrowed
an agreement
Repayment protection
Refer to drawer insurance
A statement written by a Like a payment protection
bank on a cheque that it plan, a policy that makes
will not pay, for example if repayments if a person
there is not enough money cannot afford them, for
Rr
in a person’s account, before example if they become ill
returning it to the branch of or lose their job
the bank with the account
the cheque was paid in to Repossess
Take back ownership of
Refund something, for example when
A repayment of part of a mortgage provider takes
an amount that a person over a person’s home because
has paid they have failed to pay back
the mortgage on time
Reinsurance
Insurance protection Reserves
bought by an insurer to Amounts that a company
cover it against paying sets aside in one year’s
out a lot of money to accounts that it can spend
policyholders and to help it in later years
take on more business
Retained profits
Remittance Profits earned by a business
A payment for something that have not yet been spent
43
Retirement mortgage loans and with
A mortgage that allows a certain investments
person to draw down some
cash for their retirement based
on the home’s value and Ss
that the person pays off with Savings account
interest when the house is sold An account in a bank,
Return building society or post
An amount, expressed as office, that allows a person
to build up savings and
Ss
44
Secured loan Share certificate
A loan that is borrowed A document that certifies
against a particular asset, who owns shares in a
known as security; if a company by listing the type,
person cannot make the amount and serial numbers
repayments when they are of shares owned by
due, the lender can take the shareholder
ownership of the asset
Share price
Self-assessment The cost of buying a share
Ss
A system for taxpayers to on the stock market; the
work out for themselves the more shares are bought,
tax they owe to the the higher the price
government each year
Shareholder
Service contract A person who owns a share
A contract for maintenance or shares in a company
services
Short term
Share A period of time of up to five
An investment that makes years in terms of savings
a person part-owner of a and loans
public company, along
with all other people who
Signatory
A person who signs a
have shares
document, such as an
Share capital application form or cheque
Money invested directly in a
company by its shareholders
Single Trip Cover
A type of travel insurance
that covers a a single trip
abroad
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*Social insurance Stamp duty
A government insurance A tax some people may pay
plan that compensates when they buy property,
people for loss of based on the value of the
income due to old age, property
unemployment, disability,
illness or maternity, for
Standard Variable Rate
example, and that is funded (SVR)
through PRSI contributions A mortgage rate which can
rise and fall in line with the
Solvency
Ss
46
Statement person buy goods from that
A document from a bank or shop on credit; like a credit
building society that shows card, payments are due
recent payments into and each month
from a person’s account
Sub-prime lending
Statutory accounts Lending to people who are
Company accounts that thought to be less likely than
must be filed with the others to repay a loan, for
Companies Registration example those with a limited
Ss
Office by law or poor credit history or a
recorded bankruptcy
Statutory audit
An audit, required by Subject to status
law, of a company’s Something that depends
accounts by certain on a person’s situation, for
qualified accountants example a loan that depends
on whether a person has a
Stock exchange good credit history
A market for stocks
and shares Subscribers
People who set up a
Stockbroker limited company
Someone who buys and sells
stocks and shares for clients or who pay in advance to
receive something regularly
Stock market
A place that trades stocks Subsidiary
and shares A company that is controlled
by another company
Store card
A card available from a
particular shop that lets a
47
Superannuation messaging and transaction
A regular contribution services for over 7,000
to a pension scheme by financial organisations
an employee located in 194 countries
worldwide
Surcharge
An extra charge by a bank if
a customer does not keep to
their agreement
Tt
Take home pay
Earnings after tax, PRSI
Surety
Tt
48
allowance and tax relief a piece of work a certain
for any mortgage or health way to a certain deadline
insurance payments and at a stated price
Tax evasion Term
An illegal way of reducing A clause that forms part of
the amount of tax a person a contract and a length of
owes, for example by time for which something
concealing income lasts, such as the period for
paying back a loan
Tax return
Tt
A form that a self-employed Term deposit
person must fill in to record A type of account in which a
their income and any person agrees to leave their
allowances for the year savings for a fixed time (the
and send in to the Revenue term) or face penalties
Commissioners on time to
avoid penalties and fines
Term assurance
A simple form of life
Tax this period assurance that a person
A statement on a pay slip takes out for a set period of
to say how much income time (for example, 10, 20 or
tax a person owes in a 25 years) and guarantees to
particular period, based pay out a specified sum if
on a person’s tax code the person dies during that
period of time
Tenant
A person who pays Term loan
rent where they live A loan that a person or
organisation must repay
Tender within a certain period, for
A written offer by a
example three or five years
company or person to do
49
Third party, fire and Toxic loan
theft insurance A loan that is unlikely to be
Motor insurance that pays repaid to the lender, for
out if a person accidentally example a sub-prime mortgage
causes damage to another
Tracker bond
person’s car or if their own
A type of investment
car is damaged by fire
where the final value of
or stolen
the fund depends on the
Tied agent performance of shares
Tt
50
Transaction Turnover
Any payment into or out of a The total value of a business’
person’s or company’s account sales over a particular period
Travel insurance
Insurance that can pay for
lost luggage or for medical
Uu
treatment needed for certain Unauthorised overdraft
illnesses and injuries when a charges
person travels abroad Fees that a person must
Uu
pay if they take out more
Travellers’ cheques money than they have in
Cheques in a certain their account without the
currency that a person buys permission of their bank or
and signs before they leave building society
for another country and that
they can use to buy goods Uncleared cheque
and services abroad by A cheque that has been
signing the cheques again paid into an account, but
and showing identification for which money has not
yet been collected from
Trust the bank that will pay
A legal arrangement that the cheque
transfers control over
property to a person or Under-capitalised
organisation for the benefit A situation in which a
of someone else business does not have
enough money to support
Trustee its activities and enable it
A person or organisation to expand
that controls property for
the benefit of someone else
51
Underwriter a trust manager to buy
An organisation, usually an investments and the value
insurance company, that of the units changes in line
agrees to pay a claim on an with the value of the fund
insurance policy
Unlimited company
Underwriting A company that does not
What happens when an limit what its shareholders
investment firm, such need to pay towards the
as a bank, agrees to buy company’s debts if the
Uu
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Unsanctioned VAT
overdraft Value Added Tax – a tax paid
An overdraft that a customer to the government for most
of a bank or building society goods and services
has obtained without the
Visa
bank’s permission
An international card
Upfront fee payments organisation
A fee that a person owes or owned by banks worldwide,
must pay in advance which provides credit cards
Vv
Utility bill Volatility
A bill for a utility, such The extent of change in the
as gas, electricity or value of a given market; a
the telephone market that goes up and down
in value dramatically in a short
53
Ww Working capital
The amount of money
available to a business, after
Waiting period
debts, to enable it to grow
A period of time in an
insurance policy which must
pass before some or all
cover begins
Yy
Yield
Whole-of-life policy The money made on an
Life assurance that pays out
Ww
Zz
the insurance, as long as
they continue to pay
their premiums
Zero rated
Will A term to describe goods,
A legal document containing for example books, that are
instructions on how a taxed at zero per cent
person wishes their estate to
be distributed after they die
Wind up
The end or closure of an
organisation or company
Withdraw
Taking money out of
an account
54
A-Z Your Pocket Guide to Understanding Financial Terms
A NALA/EBS Partnership Financial Literacy Programme
Published by
National Adult Literacy Agency
76 Lower Gardiner Street, Dublin 1
ISBN 1-871737-37-0
NALA © 2009.
Design: www.dcoy.ie
55
EBS Building Society is regulated
by the Financial Regulator
Registered office:
2 Burlington Road, Dublin 4.
Registered No.139
EBS131.01.09