Industry glossary.

  • ABI

    The Association of British Insurers, the trade association for the insurance industry in the UK.

  • Actuary

    A professionally-qualified individual who conducts actuarial valuations and advises schemes on transfer values, funding, longevity assumptions, etc.

  • Annual allowance

    The maximum pension contribution that can be made in any one tax year without attracting a tax charge.

  • Annuity

    An insurance contract that, in return for a single, upfront premium, pays a pre-determined annual income over a given timeframe (typically the lifetime of the purchaser).

  • AVC

    Additional Voluntary Contribution, contributions paid into a pension scheme by a member over and above any minimum contribution level in order to secure additional benefits from the scheme.

  • Contribution

    A contribution is a payment by a member or employer into a scheme.

  • Dashboard

    The Pension Dashboard is an initiative launched in 2016 by the then Chancellor of the Exchequer, to allow citizens to see information about all their pension savings through a single service.

  • DB

    Defined Benefit, a type of pension scheme whose benefits are pre-defined and whose contributions vary in order to deliver those benefits.

  • DC

    Defined Contribution, a type of pension scheme whose contributions are pre-defined and whose benefits vary according to those contributions and investment performance.

  • Drawdown

    Income taken from a Defined Contribution pension fund directly, rather than using the fund to purchase an annuity.

  • FCA

    The Financial Conduct Authority, the statutory conduct regulator for the industry.

  • Final salary scheme

    A Defined Benefit pension scheme where the benefits are defined in relation to the member’s salary when leaving employment.

  • FOS

    Financial Ombudsman Service, the statutory body for resolving complaints against financial services companies.

  • FSCS

    Financial Services Compensation Scheme, the compensation scheme of last resort for customers of businesses regulated by the FCA.

  • Governance

    Setting and managing rules and managing adherence to those rules.

  • Industry

    The UK’s Financial Services industry understood as widely as possible, including stakeholders such as government, regulatory, and trade and consumer associations.

  • Investment Bonds

    A single-premium insurance contract that accrues value over time in line with investment choices made by the customer. The customer can choose whether to make withdrawals from the Bond, or allow returns to accrue until the Bond is surrendered (or a mixture of both).

  • ISA

    Individual Savings Account, a vehicle that allows individuals to save and invest in a wide range of assets without the resulting growth attracting income or capital gains tax.

  • Lifetime allowance

    The maximum value of pension benefits that can be taken over a person’s lifetime without incurring additional tax charges.

  • MiFID II

    Stands for Markets in Financial Instruments Directive II, part of the European regulatory framework for firms who provide services to clients linked to ‘financial instruments’ (shares, bonds, units in collective investment schemes and derivatives), and the venues where those instruments are traded. Designed to increase transparency around costs and charges, and improve investor protection through better product governance.

  • PCLS

    Pension Commencement Lump Sum, and often called Tax Free Cash. Most pension schemes permit members to take a proportion of their benefits (usually 25%) as a lump sum that is tax-free.

  • Pension freedoms

    The collective name given to a number of reforms introduced by the then Chancellor of the Exchequer in 2015, including the end of compulsory annuity purchases, and the ability from age 55 to take lump sums from uncrystallised pension funds at only the marginal income tax rate.

  • Pension Tracing Service

    A Government service that helps pension savers find contact details for workplace and personal pensions.

  • Platform

    A service that provides access to a wide variety of investment funds and other investment vehicles.

  • PLSA

    Pension & Lifetime Savings Association, the national association for pension schemes and those involved in running them.

  • Re-registration

    The movement of members’ assets from one scheme to another without selling and re-purchasing them. Sometimes referred to as in specie transfer.

  • Scheme

    An arrangement that provides its members (and, in some cases, their employers) to save and invest in a tax efficient way towards providing an income in retirement.

  • Standards

    A standard is a common-agreed way of achieving something. Criterion helps the industry agree standards for defining and moving data; delivering business processes; even for creating legal agreements.

  • TeX

    TISA eXchange, a membership organisation established to improve performance in transfers and re-registrations.

  • TPR

    The Pensions Regulator, the statutory regulator of workplace pension schemes in the UK.

  • Transfer

    The movement of members’ assets or cash from one scheme to another.

  • Transfer value

    The value of benefits that a member can transfer from one pension scheme to another. In Defined Contribution schemes, this is the value of contributions plus investment growth; for Defined Benefit schemes it is an actuarially-calculated cash equivalent of the benefits due to the member under the scheme.

  • TRIG

    Transfers and Re-registration Industry Group, a group formed by ten financial services trade bodies to develop an approach to improving performance in transfers and re-registrations.