Marginal tax rate

The rate of tax you pay on the next £1 of income you receive. Keep in mind that your marginal tax rate will be higher than the actual amount of tax you pay as a percentage of your overall income.

For example, in the UK most taxpayers have a tax-free personal allowance of £12,570. On this first band of earnings, you’ll pay no income tax. On the next band (£12,571 to £50,270) you’ll pay 20% – then 40%, then 45% on your next bands of earnings.

So, someone earning £60,000 will have a marginal tax rate of 40%, even though they won’t pay 40% on the whole of their earnings.

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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