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Consumer > How a pension works > S to Z
S to Z
| Term | Definition |
|---|---|
| Selected Retirement Age | The age at which members of a personal pension or stakeholder pension choose to start receiving retirement benefits. This is selected when the plan is started. Also known as selected pension age. |
| Self Invested Personal Pension (SIPP) | A type of personal pension which gives the holder greater choice and more control of how their pension fund is invested. |
| Stakeholder Pension Plan | A low cost pension introduced by the Government in 2001 for individuals wanting to save for retirement but who are either ineligible to join an occupational pension (such as the self-employed) or who simply want to top up their retirement savings. |
| State Earnings Related Pension (SERPS) | A State Pension which is based on earnings between certain levels. Replaced by the State Second Pension in April 2002. Any benefits accumulated before this date are maintained. |
| State Pension Age (SPA) | The age from which State retirement benefits start. This is 65 for men and 60 for women. From 2020 the SPA will also be 65 for women with the increase being phased in gradually from 2010. Also known as the State Retirement Age (SRA). |
| State Second Pension (S2P) | A State Pension which is based on earnings between certain levels (or assumed earnings for low earners). Replaced the State Earnings Related Pension (SERPS) in April 2002. |
| Tax-Free Cash (TFC) | A tax-free lump sum available on retirement. Taking this lump sum payment usually reduces the regular income that can be provided by a pension. Also known as a pension commencement lump sum. |
| Tracker Fund | A type of investment fund designed to match the performance of a particular stock market index, such as the FTSE-100 (the index of the 100 largest public listed companies in the UK). |
| Transfer Payment | The transfer of pension benefits from one pension plan to another. This can be less than the existing value of the pension. Also known as a transfer value. |
| Trustee | An individual or company appointed to ensure that a pension scheme is operated in a manner that is in the best interests of the member(s). |
| Unit Linked Fund | An investment fund which is split into units. Payments into the fund purchase units. The price of units fluctuates depending on the value of the underlying investments - company shares (equities), property etc. Nearly all investment funds available through pensions are unit linked. |
| Unsecured Pension | A method of receiving an income from a pension without having to purchase a lifetime annuity. The income can be provided in two ways - income drawdown/withdrawals and short-term annuities. |
| Waiver of Premium | A benefit that allows regular payments to continue to be credited to a personal pension on illness or incapacity. Withdrawn to new plans from 6 April 2001. |
| With Profits Fund | A type of investment fund which invests in a range of different types of asset, including company shares (equities), property, government bonds (gilts) and cash deposits. Instead of getting direct investment returns, for example dividends, rent or interest, planholders receive bonuses. Bonuses are designed to allow the fund value to grow more steadily over time by smoothing out some of the larger fluctuations typical of investment performance. |
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