Jargon Buster | Glossary of Investment Terms

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RDR (Retail Distribution Review)
Launched by the FSA (Financial Services Authority) with the aim of providing consumers greater confidence and trust in the retail investment market place. The changes (which UK Independent Financial Advisers who are authorised by the FSA must adhere to), are effective from 31 December 2012. More information can be found at http://www.fsa.gov.uk/rdr

Reduction in yield
The difference between expected growth rate (without bond charges) and the expected growth rate (taking bond charges into consideration). For example: An investment is expected to grow at 7% per annum. Taking bond charges into consideration, the expected growth is more like 4.5% per annum. The Reduction in Yield is 2.5% (2.5% is the difference between 7% and 4.5%).

Regular Income Payment (RIP)/Regular Withdrawal
These can also be referred to as regular withdrawals. A payment that is set up from the policy/bond to provide the policyholder with a regular income at a specified frequency (For Example: £200 per month).

Reinstatement
For a regular premium policy/bond, this means making the policy active again by paying premiums following a period of delayed or missed premium payments (which causes the policy/bond to lapse).

Reinsurer
A company that insures an insurer's risk.

Remittance basis
The remittance basis is an alternative tax treatment that is available to those people who are resident but not domiciled in the UK, or not ordinarily resident in the UK. Individuals who are taxable on the remittance basis are liable to UK tax in the normal way on their UK source income and gains. But they are only liable to UK tax on any amounts of foreign income and gains that they remit to the UK. More information can be found at http://www.hmrc.gov.uk/helpsheets/hs264.pdf