A state pension is a regular payment provided by the government to eligible individuals upon reaching retirement age. It serves as a financial support system, offering a source of income to help cover basic living expenses for individuals who have contributed to the state pension scheme during their working years.
A private pension is a personal retirement savings plan established by an individual, separate from government-sponsored pension schemes. It typically involves regular contributions made during one’s working years, with the goal of providing financial support and income during retirement.
What is an index fund?
A bond is a fixed-income investment where an investor loans money to a borrower, typically a government or corporation, for a defined period at a predetermined interest rate. The borrower pays periodic interest and returns the principal at maturity, providing a predictable income stream for the investor.
A government bond is a debt security issued by a government to raise capital. Investors purchase bonds, effectively lending money to the government, and in return, they receive periodic interest payments and the return of the principal amount upon maturity.
An ISA (Individual Savings Account) is a tax-efficient financial account in the UK that allows individuals to save or invest money without paying income tax or capital gains tax.