Jargon Buster

Exit penalty

Also known as an early encashment or exit charge, this is a charge applied by a financial institution when you cash in an investment or repay a loan within a set number of years or before a certain date.

Execution-only

This is a type of transaction where a stockbroker is instructed to buy or sell a particular investment on your behalf. The stockbroker has no say about the trade and does not provide you with any advice in relation to the merits of it.

Equity

Equity is the value of any assets you own after any debts are paid.

Equities

Another name for shares in a company.

Entry charge

This is a charge for setting up your pension plan or investment.

Endowment trader

An endowment trader is an individual or company that specialises in buying endowment policies from policyholders.
For people considering surrendering or cashing in an endowment policy, it may be worthwhile comparing the options of cashing it in with the insurance company or selling it to an endowment trader in order to obtain the best value.

Endowment policy

An endowment policy is a type of investment plan offered by life assurance companies. Premiums are usually paid into the policy each month and the money is invested in assets such as shares, bonds and property. The aim is to increase the policy value so that after a set number of years it will be sufficient to provide a desired sum.
Endowment policies have often been set up to run in conjunction with an interest-only mortgage with the intention being that the proceeds of the endowment policy will then be used to pay off the mortgage borrowings.
Endowment policy values can fall as well as rise and there is therefore no guarantee that such a policy will raise enough funds to repay a mortgage.

Early repayment charge

A charge you may have to pay if you break a mortgage deal e.g. by paying it back early or moving to another lender.