Additional Voluntary Contributions (AVCs): Schemes that allow individuals to try and enhance their pensions - they allow tax relief.

Administration: Poorly performing companies may go 'into administration'. This refers to a situation whereby an administrator is appointed to assist the company with paying off its debts (to creditors).

Administrator: See administration.

Alternative Investment Market (AIM): London financial market that was opened specifically to allow small and fast-growing companies to be listed. It should be noted that less regulation governs this market than the main London Stock Exchange, so there is a larger element of risk involved in investing in AIM-listed companies.

Analyst: Somewhat sketchy term that is used to describe just about anyone that professes to specialise in financial research.

Appreciation: Term used to describe the increase in value of an asset (often applied to shares).

Balance Sheet: A financial report regularly issued by companies. It provides a detailed breakdown of what a company owns and owes, together with an analysis of the company's assets.

Bank of England: Has responsibility for regulating the banking industry in the United Kingdom. The Labour Government that came to power in 1997 broadened the role of the organisation so that it is also now responsible for setting interest rates.

Building Society: Different from a bank in that this is a mutual organisation and is thus owned by people that save with it, or borrow money from it. In the last 10 years many have converted to banks, paying out windfalls to customers as they do so. As a result, some individuals have attempted to save with particular building societies that they believe will soon convert to banks (and hence pay them a windfall payment). Such individuals have become known as 'carpet-baggers'.

Bull: Used to describe someone who is an optimist in financial matters - particularly associated with the stock market.

CAC 40: Index of the major 40 companies on the French Stock Exchange in Paris.

Capital: Describes the cash or property owned by a company. Also used to describe the cash held by individual investors.

The City: The financial district of London, which is made up of the Square Mile of the old City of London. Geographically, it is the area with the Thames at it south, Islington to the North, the Law Courts to the west and the Tower of London to the east.

Close Period: The period of time between a company's balance sheet date and when it publicly announces its results. During this period of time company directors are not able to trade in shares.

Creditor: Somebody that you owe money to.

CREST: A computerised system that enables the automated dealing of shares.

DAX: The index of top companies used by the German Stock Exchange.

Day Trader: Term used to describe people who make regular stock transactions during the space of a trading day. Typically such traders may not even own shares overnight. A risky way of trading and one that is definitely not recommended for the faint-hearted!

Demutualisation: The process that building societies (or other mutual organisations of a similar nature) go through before they become banks.

Dividend: Money, shares or other assets that are distributed by a company to its shareholders.

Dow Jones Industrial Average: Index of top companies used on Wall Street, the US stock exchange.

Earnings Per Share (EPS): The net income of a company, divided by its number of shareholders. A key indicator that guides the value of companies - you'll often see this figure quoted by financial experts.

Endowment: A life assurance and savings/investment policy. Often sold as part of a mortgage but highly contraversial.