Jargon Buster

Key pension terms and their meanings

Pensions and retirement can be an alphabet soup of confusing terms at times. Do you know your S2P from your SIPP? Any idea what an open market option is? And how about trivial commutation, enhanced annuities, or the lifetime allowance? Don’t worry – if you’re not yet au fait with your DB, DC, AMC or IHT, our pensions jargon buster has the pension phrases and meanings that you need.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Annual Management Charge (AMC)
Annuity
Automatic enrolment

C

Capped drawdown

D

Defined Benefit (DB) pension plan
Defined Contribution (DC) pension plan

E

Enhanced annuity

F

Flexible income drawdown

H

Hybrid pension schemes

I

Income drawdown
Inflation
Inheritance

L

Lifetime allowance
Lump sum

N

NISA

O

Open Market Option
Over 80s pension
Pension Tracing Service
Pensioner inflation
Personal pension
Power of attorney

S

Self invested personal pension (SIPP)
Small and stranded pension pots
Stakeholder pension
State Pension
State Second Pension (S2P)

T

Total Expense Ratio (TER)
Trivial commutation

W

Will

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