Glossary - N | Skandia UK

National Insurance Contributions

A payment made by most employers, employees, self-employed (and some unemployed) people to the government to fund such things as national healthcare and education. 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

The total level of savings, defined as the income remaining after consumption, of a country’s households.

Negative periods

The number of months over the last 12 months that a fund has reduced in value.

Negative screening

Negative screening is the most commonly recognised strategy. It means not investing in companies that do not meet the ethical standards by which the fund is run. For example, not investing in tobacco or defence companies.

Negotiable instrument

A piece of paper representing ownership of a financial asset or debt, and capable of being traded in the money market (eg Bill of Exchange, Promissory Notes).

Net

Interest received on a savings account after tax has been deducted. This term also applies to premiums paid net of tax relief.

Net asset value (NAV)

The valuation of a collective investment based on the market value of securities added to the cash element held in its portfolio.

Net interest

Interest received on a savings account after tax has been deducted.

Net present value (NPV)

The current value of a stream of income discounted by a factor (usually inflation) over the period of an investment.

Net relevant earnings

Net relevant earnings are used to determine the maximum contributions to a retirement annuity, personal pension or stakeholder pension. They are your relevant earnings less allowances deductible for tax in relation to business purposes and any losses from business.

New issue

Any type of security issued to raise additional money. Offerings are made to existing shareholders, through rights issues or entitlements and/or to non-shareholders.

NICO

National Insurance Contributions Office.

Nil rate band

Refers to the ceiling on earnings for income tax purposes, under which no tax is payable.

No claims bonus

A reduction in an insurance premium because the customer has a claim-free record.

Nominal value

The face value of something eg a share issue.

Nominee

An individual or company in whose name a security is registered to be owned, although the real (or beneficial) ownership is actually held by another party. Nominee companies are often used by share investors who for some reason wish their identities to remain undisclosed or who simply require another party to manage (or hold as custodian) their investments.

Non contributory pension

An occupational pension where the employee does not make any type of contribution. It is entirely funded by the employer.

Normal retirement date

Refers to the date when benefits can normally be taken from a pension scheme, as defined in the rules of the plan.

Not contracted out

Someone who has not contracted out of the State Second Pension.