Pensions Glossary - N

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N2 Date. The date on which the Financial Services Authority will receive its full powers and become fully operational.

Naked Trust. See 'Absolute Trust' Name. Member of a Lloyds syndicate who pledges security for insurance arranged by Lloyds of London insurance underwriters.

National Insurance Contributions. An additional form of tax paid by most employers, employees, self employed (and some unemployed) people. For the employed it is deducted from income by the employer on a scale related to income levels. The employed pay part flat rate, part income related. The self employed and the unemployed may pay a flat rate voluntary contribution to keep their benefits entitlement up to date.

National Savings. A 'branch' of the treasury, selling investment, savings and deposit products over the counter at post offices with the aim of raising money for the government, and providing medium to long term financial planning products for customers.

National Savings Stock Register. Register of gilts which may be purchased through the Post Office.

Needs Analysis. The breaking down of a situation to determine whether there are areas of risk or weakness that should be protected.

Negative Equity. The situation where the value of the property falls below the outstanding loan(s) used to purchase it.

Negotiable. Open to discussion and bargaining; something in which the title can easily be transferred to another person. Nest Egg. Supply of 'emergency' or 'future use only' money usually saved over a period of time. Net. After all deductions have been made.

Net Book Value. The written down value (after allowing for depreciation) of an asset.

Net Pay System. Refers to the situation where employee contributions to an occupational pension scheme are deducted from gross income before tax is applied. This avoids the need to adjust the tax code.

Net Profit. Profit after all deductions except tax and dividends.

Net Relevant Earnings. A definition of 'pensionable income' for the self employed by which Personal Pension Plan contributions are determined. Relevant earnings less business expenses (includes stock relief deductions, losses or capital allowances). NRE for employed PPP holders is effectively gross PAYE pay.

New Code. A code of approval for new occupational pension schemes established after the Act which was introduced by the 1970 Finance Act. Approval for schemes currently is under the Income and Corporation Taxes Act 1988.

Nikkei Average. Index of prices of certain leading shares quoted on the Tokyo Stock Exchange.

Nil Rate Band. Refers to the ceiling on cumulative transfers for IHT purposes, under which transfers do not attract tax.

No Claims Bonus. Reduction in premium when no claims have been made over an agreed period.

Nominal. Small payment, or value Nominal Capital. Total face value of authorised issuable capital.

Nominal Ledger. The account book showing expenditure on nominal accounts i.e. named business accounts such as postage, printing, etc.

Nominal Value. The par, or face, value of something e.g. a share issue.

Nomination. The naming of a person to receive an award or benefit e.g. similar to an expression of wish under a group life assurance scheme.

Nominee. Someone who is nominated to deal with certain matters on behalf of another party.

Nominee Account. An account operated by, say, a trustee or stockbroker, which holds shares or other property for you in the name of a trustee or nominee, not in your name e.g. shares in a PEP are held in such an account.

Non-Medical Limits. Refers to underwriting limits, whereby sums assured up to certain levels, other things being acceptable, will not require a medical examiners report. See 'Free cover'.

Non-Profit. A policy where the value of the policy at maturity is guaranteed at outset.

Non-Qualifying Policy. One which does not satisfy all of the qualifying rules.

Non-Recourse. Where finance is raised to purchase a leased asset, the lender will have recourse to the assets held by the lessee in case of default, but not to the lessor/borrower.

Normal Expenditure. An exempt lifetime transfer under IHT rules, whereby to avoid being classified as a PET the transfer must be part of normal expenditure and not affect the standard of living of the donor.

Normal Retirement Age. The expected retirement age, usually for pension purposes, as defined in the scheme rules.

Normal Retirement Date. Refers to the expected or usual retirement date assumed when setting up a pension scheme. e.g. end of the month following 60th birthday.

Nostro Account. Bank account held by a UK bank with another bank abroad.

Notary Public. Lawyer with authority to witness written documents and verbal statements, thus making them official. Someone who attests to the validity of deeds and other documents for official use.

Notional. Assumed, unquantified, not known exactly. Novation. An agreement to replace one of the original parties to a contract with a third party.

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