Jargon buster

Although we've tried to keep the use of financial jargon to a minimum on this site, there are a few instances where no other terms can be used. We've therefore tried to provide you with a further explanation of these below.

Qualified Registered Overseas Pension Scheme (QROPS)

This is an overseas pension scheme into which UK pension rights can be transferred. Since 2006, people with UK pensions who are, or will become, non-resident in the UK for tax purposes can move their pension benefits out of the UK to a QROPS. This can prove highly advantageous.

Smoothing

This is the process used in with-profits investment where a portion of the investment gain earned in good periods is kept back to smooth out the effect of losses in not so good periods, meaning that the value of your investment fluctuates less than it would in other types of funds. Remember that although smoothing can provide a certain amount of protection, it can't cancel out the impact of a sustained fall in investment returns.

Guarantee

This is a promise that we would pay out the initial value of your investment (minus any regular withdrawals (including fund advisor fees), partial surrenders and switches out) on the guarantee date. The guarantee date is the plan anniversary at the end of the selected term and the guarantee will only apply on this date.

Withholding tax

This relates to Spanish tax that we are required to withhold on any gain your investment makes if this is withdrawn from the bond. We pay this on your behalf to the Spanish tax authorities.

Offshore

This term is used to describe a range of locations where companies can offer customers growth on their funds that is largely free from tax. This includes "true offshore" locations such as the Channel Islands and Isle of Man, and other locations such as Dublin - where Prudential International is registered. Tax treatment can vary from one type of investment to another, and from one market to another.

AILO

Association of International Life Offices (AILO), a trade organisation which aims to encourage professionalism and high standards amongst its members.

Standard & Poor's

Standard & Poor's are an independent credit ratings provider.

Allocation rate

This is the percentage of your initial investment that actually goes toward the final investment. This amount is net of any fees that may be incurred upon initial investment and is effectively the amount that is exposed to the investment.