Pensions Glossary - H

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Haggle. Verbal negotiations regarding the price of goods or services, during which the seller will try to keep the price high, and the buyer will try to bring the price down.

Hancock Annuity. An immediate annuity purchased at retirement by an employer for an employee, or a beneficiary of an employee.

Hang Seng Index. Arithmetically weighted index based on the capital value of leading shares quoted on the Hong Kong stock exchange.

Headroom Test/Check. 'Maximum benefit' test for FSAVCs to ensure that FSAVC plus main occupational scheme benefits together do not produce more than the maximum benefits permitted by the PSO. Operates when contributions to FSAVC exceed £2400 p.a Health Insurance. See Private Medical Insurance.

Hedge. Action taken against the possibility of loss caused by a change in prices e.g. by buying raw materials in advance of having to supply the finished goods.

Hereditament. Generally, property capable of passing to an heir. Corporeal hereditaments include land and buildings. Incorporeal hereditaments are rights in land such as easements (e.g. a right of way) and profits a prendre (e.g. the right to take produce from the land or to graze livestock on it).

Heuristic. Problem solving using non-analytical techniques eg de Bono's "Lateral" thinking and other creative thinking techniques.

Higher Rate Tax. Any rate of income tax in excess of basic rate tax. Hire. Short term use of an asset in return for a fee.

Hire Purchase. A method of buying goods by paying regular sums over an agreed period. The sums involved will usually cover the cost of the item and an element of interest. At the end of the hire period, the asset will legally pass to the hirer on payment of a nominal sum.

Histogram. A bar chart where the area, rather than just the height of the bar, serves as the comparison.

Historic Pricing. Price quoted for units based on existing valuation of underlying fund assets.

Hive Off. Generally taken to mean separating a small, autonomous part of a business so that it becomes a separate, subsidiary business in its own right.

Holding Company. 'Parent' company with controlling interest in subsidiary company. A company which often exists only to hold shares in a group of subsidiary companies, and which holds over 50% of the ordinary shares of those companies. See 'Parent Company'.

Holdover Relief. Relates to gifts of business property where no CGT becomes payable at the time of the gift. As a result, the value in the recipients hands is deemed to be reduced by the amount of gain, so that the amount of gain will be high on subsequent disposal.

Holistic. When used in conjunction with financial planning, refers to the consideration of all aspects of a persons financial involvements.

Home Banking. The use of a computer and special terminal connection to conduct basic banking transactions such as paying bills, transferring sums from account to account.

Home Income Plan. A plan to use one's home to generate extra income. The basic idea is to borrow money (using the home as security) to buy an annuity. Part of the annuity pays the loan repayments or loan interest, the balance representing the extra income.

Home Responsibilities Protection. A scheme which protects entitlement to state basic pension during periods one is at home caring for another person.

Home Reversion Scheme. Similar to a home income plan, except here the money is raised by selling one's home, but retaining the right to live in it until death.

Home Service. In insurance terms, insurance that is transacted by collecting agents calling at policyholders homes for premiums due. Both premium and sum assured levels are of low value.

Honorarium. Money paid out for services rendered voluntarily i.e. when a fee has not been requested. Horse Trading. Haggling, hard bargaining.

Hospital Cash Plan. An insurance which pays out cash sums of varying amounts depending on the reason for a hospital stay, and determined by the length of the stay.

Hospital Report. This may be requested during the underwriting of a life assurance or PHI proposal, when relevant information relating to hospital treatment may not be available from the GP.

Hybrid Schemes. Occupational pension schemes which combine money purchase and final salary benefits. Also used to describe self administered schemes marketed by insurance companies where some assets are invested in insurance company's funds.

Hyper-. Prefix meaning extremely large, as in hyperinflation, or extremely high inflation.

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1998 - 2007 UK Pensions - Planning before, at the onset and during retirement - Pensions.co.uk