P/E

Price/Earnings Ratio. This is calculated by dividing the market price of a company’s ordinary shares by its earnings per share figure. The ratio reflects the market’s expectation of the future earnings of a company in relation to its current earnings; in other words, its performance potential.

PAYE

Pay as you earn method of income tax collection

Payment Holiday

This is offered by some mortgages that allow you to miss monthly payments on your mortgage.

Pension Mortgage

A mortgage whose capital repayment is funded by contributions to a personal pension.

PEP

Personal Equity Plan. PEPs were replaced by ISAs in 1999. Although you can no longer open invest in a new PEP you can still transfer your existing PEPs.

Per Capita

Per person, by or for each individual.

Per Mille

Per Thousand. The premium rate for some types of group insurance is quoted per £1000 of benefit.

Personal Equity Plan

A Personal Equity Plan allows individuals to enjoy the profits from stockmarket-related investment free of income tax and capital gains tax. PEPs were introduced in 1987 but from 6 April 1999, new investment in PEPs is no longer possible. However, existing PEPs can continue in existence and for up to five years.

Personal Investment Authority

A self-Regulated Organisation (SRO) set up under the securities and Investment Board (SIB) with responsibility for regulating retail financial services.

Personal Loan

An amount of money borrowed from a bank or other lender by an individual.

Philanthropic Advisor

An individual or firm who provides counselling and evaluative services to donors before and after grant making decisions.

PIA

The Personal Investment Authority, which regulates the way in which financial products are marketed, promoted and sold.

PLC

Public Limited Company. Denotes any company which has share capital of at least a fixed amount.

Polarisation

The requirement for a financial adviser to be either ‘tied’ to one financial product provider, or completely independent. A provision of the Financial Services Act.

Pooled Investment Fund

A vehicle for bringing together the investments of many people or organisations and using the combined funds to obtain economies of scale and investment management skills not available to individuals. Examples include unit trusts, investment trusts, etc.

Portability

All the interest rates in this range are portable. This means that if you move home during the discounted or fixed rate period, you can enjoy the same rate, on the amount outstanding on your original loan, for the remainder of the discounted or fixed rate period.

Pound Cost Averaging

Pound Cost averaging is a benefit of making regular savings in the stock market, especially when the market is volatile. In practice it means that you can get more for your money by investing in smaller, regular amounts.

Premium

The single or regular periodic payment made to an insurance company in respect of an insurance policy.

Present Value (PV)

The selling price at the time of sale i.e. now.

Pre-tax Net Income

A corporation’s annual net income before it has paid taxes. In the USA, The Internal Revenue Service currently allows corporations to deduct charitable contributions as much as 10% of their pre-tax net income.

Public Foundation

A non profit organisation that receives at least one-third of its annual income from the general public (including government agencies and foundations). Public foundations may make grants or engage in charitable activities.

Purchase Option/Purchase Option Price

The purchase option price is agreed on between you and the lessor at the time you sign your lease. This is the price at which you can purchase the property if you decide to exercise your purchase option at the end of your lease.