MONEY: PENSIONS JARGON BUSTERS
Sunday 14 March 1999
Allocation rate: the percentage of your contribution that actually goes into your pension fund. It can be misleading. For example, pension companies sometimes claim an allocation rate of 102 per cent, which looks attractive until you realised the allocation is applied after the bid/offer spread. This means you invest pounds 100, lose 5 per cent through the bid/offer spread and only then gain 2 per cent through the allocation.
Policy/plan/initial fee: charged on every contribution you make. A pounds 2 monthly charge may seem little but if you are paying pounds 50 it adds up to 4 per cent.
Annual fund management charge: can be a further 1 or 1.5 per cent of your fund value.
Front-end loading: where the initial commission for setting up your pension is paid to an IFA upfront. This can eat up to 85 per cent of your first two years' contributions.
Level-loading: the IFA's commission is paid over the full course of the pension.
Carrying back: this allows you to make a contribution in one tax year but have it treated as if it had been paid the previous year to exploit any unused tax relief
Carrying forward: if you have unused tax-relief on personal pension contributions from the last six years, you can claim this relief on extra pension payments.
The Independent's live blog of today's Premier League action
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Matthew Miller: American sentenced to hard labour in North Korea 'wanted to be Snowden II'
- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
4Chan naked photos leak: Celebrity Twitter reactions to the mass breach of privacy
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
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