Annuity A product that pays a regular income in return for a lump-sum investment. Pension investors must use their pension funds to buy an annuity before they reach the age of 75. The interest rate at which the Bank of England lends money to large institutions. Bid-offer spread The difference, respectively, between the price at which an investor may sell and buy a share or units in a fund. Bond A loan to, for example, a company or government that can be bought and sold by investors, and that offers a regular interest payment.
Bonds are usually repayable on a set date in the future.
Bull An investor who feels positive about the prospects for shares. The commission is paid by the product provider from the fees it charges to investors. An adviser that waives some or all of its sales commission on a financial product, enabling investors to buy more cheaply. A relatively immature stock market that is characterised by high share price volatility but which can be profitable in the long term. Endowment A type of investment that also provides life insurance.