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Life assurance:  A general term to describe different types of personal protection policy, whose main purpose is to provide payment in the event of death.

Life insurance: An alternative phrase used to describe Life Assurance (see Assurance described above).

Lifetime Allowance (LTA): The maximum value of fund a pension scheme member can accumulate without incurring a tax charge.  The lifetime allowance increases over time it is set at:

2007/08 - £1.6m        2008/09 - £1.65m       2009/10 - £1.75m        2010/11 - £1.8m

       Funds in excess of the lifetime allowance are felt to have benefited unduly from pension scheme tax advantages and therefore a tax charge is made.

Mortgage: A type of loan used to purchase property. In order for a borrower (mortgagor) to give a mortgage to a lender (mortgagee) they must obtain a legal charge on the property, giving security for a loan

Money Purchase Scheme: See defined contribution scheme.

National Insurance Contribution (NIC): Payments deducted from pay or declared through self assessment, used by the DWP to fund the state pension and other state benefits.

National Insurance Contributions Office (NICO): A part of HMRC. They administer the collection of National Insurance Contributions.

Normal Retirement Age (NRA): The contractual age that retirement benefits are paid from an occupational pension scheme.  The minimum pension age is currently 50 years.  Pension simplification from 6 April 2006 increase this retirement age to 55 from 6 April 2010 and it is up to the schemes to decide how to implement the change. This applies to taking the tax free lump sum, purchasing an annuity and income drawdown.

Between 6 April 2006 and 5 April 2010 it will be legal for those aged 50 years and over to take pension benefits.

While others try and confuse you with complex and fancy language we like to keep it real and simple.

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