Additional voluntary contributions (AVCs): The extra amounts of money you may choose to save in order to enhance your occupational pension.

Amortisation: The reduction of the value of an asset by assessing proportionately it's cost over a period of years.

Annual equivalent rate: Interest calculated under the assumption that interest is paid and compounded every year.

Annual percentage rate (APR): Interest that a loan will cost you each year.

Annuity: A series of fixed-amount payments paid at regular intervals over a specified period – usually a pension from an insurance company.

Annuity rate: The rate of exchange at which a financial institution will convert your pot of money into an annuity.

Bond: A loan which you, the investor or 'bondholder', agree to give to a company (or a government) for a fixed period in return for a fixed rate of interest.

Building survey: A thorough survey of your property that investigates the building’s condition in great detail.

Capital Gains Tax: A levy on any profit over £7,700 made by disposing of shares or similar assets. The rate depends on the level of your income liable to income tax.

Capped-rate mortgage: A mortgage with an interest rate that cannot go above a certain level, even if mortgage rates rise, but can fall as rates drop.

Derivatives: Contracts to buy or sell a particular security at a given point in the future for a particular price.

Discounted-rate mortgage: A mortgage with a guaranteed reduction in the variable mortgage rate - usually a few per cent.

Discretionary will trust: A simple method for avoiding inheritance tax that allows your beneficiaries to borrow back assets in trust in the form of an interest-free loan.

Endowment: Assets, funds or property donated to an institution, individual or group as a source of income.

Equity: Stock or any security representing an ownership interest.

Excess: The amount of an insurance claim that must be met by the claimant.

Financial Services Authority (FSA): The top investment watchdog, set up by the government under the Financial Services & Markets Act 2000.

Fixed-rate mortgage: A mortgage with an interest rate that is pegged at a set level for an agreed number of months or years.

Futures: Types of derivative that allow you to bid for the right to pay a future value on either an index option or a commodity.

Homebuyer's survey: A fairly thorough investigation of a property that will reveal serious defects.

Independent financial adviser (IFA): A financial adviser who is not employed by a particular company to market their products and is regulated by an investment watchdog.

Interest-only mortgage: Monthly payments to the lender which are simply made up of interest. You don't pay off any of the capital of the mortgage during the term of the mortgage, but do so at the end, having accrued a large enough amount of money in an investment fund.

ISA (Individual Savings Account): A method of saving introduced by the government in 1999. The basic choice is between a mini-ISA, which allows you to save up to £3,000 a year, tax-free, and a maxi-ISA that allows an annual tax-free saving of £7,000.

Inheritance tax: A death levy of 40% incurred by everyone with a net worth of more than £263,000.

Investment trust: A public limited company that makes investments into a variety of other companies.

Mis-selling: Selling a financial product that is not in a customer’s best interests. The financial services industry looks set to pay out over £11bn of compensation for pensions mis-selling from the late eighties and the nineties.

Mortgage valuation: A cursory building survey affair intended to assure the mortgage lender that it will be able to sell the property and get its money back, should the owners default on their payments.

New Issue: The first time a company is floated on the stock market. Also known as an initial public offering, or IPO.

Occupational pension: An agreement an employer makes to provide for their members of staff in retirement via a regular salary.

Open Market Option: Your right to search the marketplace for the best possible pension.

Personal Equity Plan (PEP): Savings plans replaced in 1999 by ISAs. Allowed investors to put £9,000 per year into equity-based investments and earn tax-free interest.

Personal Investment Authority (PIA): A body that until 2001 regulated independent financial advisers and anyone marketing retail investment products to the general public. Subsumed by the Financial Services Authority.

Personal pension plan (PPP): A private pension that attracts tax relief.

Potentially exempt transfer: A loophole to avoid paying inheritance tax that basically involves giving away your assets. Whatever you hand over free of charge is exempt from death tax as long as you survive the donation for more than seven years.

Repayment mortgage: The monthly repayments pay off both the interest and the capital on the mortgage. Early on, the majority of the monthly payment goes towards the interest.

Rights issue: When a public company creates new shares.

Securities: Any kind of financial asset that can be traded.

Stakeholder pension: A simple, low-cost alternative to many of the private and occupational pension options on the market. Aimed at people with low incomes.

Stamp duty: A tax you pay on buying shares (0.5%) or buying properties (1%).

State Pension: A small weekly amount paid to you by the state upon retirement, based on your National Insurance contributions over the years.

Superannuation: Another name for an occupational pension.

Tax-efficient investments: Savings and investment packages such as Personal Pension Plans, AVCs, ISAs and formerly PEPs and TESSAs.

Term insurance: No-nonsense life insurance where you pay low premiums that increase, as you get older. Pays out if you die before a specified age. If you don’t, you receive nothing.

TESSA: Tax Exempt Special Savings Account. Now replaced by the ISA. A bank deposit account investment that was tax-free if you kept your money in it for five years.

Whole of Life Insurance: This will cover you until you die, whenever that may be, unlike term insurance.