Annual allowance

The amount you’re allowed to pay in across all of your pensions, per tax year before a tax charge might apply. This includes not only money you contribute yourself, but also the tax relief you get from the government as well as anything paid in by your employer.

The standard annual allowance is currently £60,000 per tax year but you can also carry forward allowances you didn’t use in the previous three tax years. If the total amount paid into all of your pensions in a tax year (including tax relief top ups) is more than your total allowance then you will face a tax charge.

If you have a high income (usually over £260,000 p.a.), your annual allowance will be tapered. It will also be lower if you’ve already accessed and taken an income from defined contribution pensions, which triggers the MPAA.

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Popular terms

Alternative Investment Market (AIM)

The junior marketplace of the London Stock Exchange, acting as a way for small and medium-sized growth companies to access investors. There are weaker regulatory requirements for companies that want to list on the AIM compared to the Main Market, which can mean less protection for investors.

AJ Bell offers dealing within the AIM market via our investment platform.

Aquis Stock Exchange

An alternative junior marketplace to the Alternative Investment Market (AIM), offering a place for small and typically less mature companies to trade their shares. This is separate to and not owned by the London Stock Exchange.

Companies listed on the Aquis Stock Exchange tend to be at a very early stage of development with low levels of liquidity and little or no trading history, making them harder to buy or sell – and therefore a riskier investment.

AJ Bell offers dealing within the Aquis Stock Exchange via our investment platform.

Bond

A type of investment in which you lend money to a company or government. In return you get interest payments and repayment of the money you lent at the end of a specific term. The interest rate and term are set at the start of the investment.

Investing in bonds is generally considered safer than shares. But there are still risks, primarily default risk (i.e. the company or government becoming insolvent), inflation risk, and the risk that interest rates rise over time.

A bond issued by the UK government is also known as a gilt. You can buy bonds directly, as well as invest in funds that hold bonds.

See our bond offering Read more about bonds