Glossary: P

P45

This is the document that your employer has to give the tax office so that the right amount of tax can be deducted from your earnings. All employers are required by law to give you a P45 when you leave a job.

PASSPORT

A passport is a legal document that you must show when you travel to other countries. Passports are a good form of identification, because they are an official Government record of your identity, and they contain your photo. Your passport will only be accepted as a form of ID if it is valid – that is, as long as it is current (passports have to be renewed every ten years) and the details are all correct. You can apply for a passport by getting an application form from your local Post Office – new passports cost about £30 for adults. If your passport is lost or stolen, report it to the police. The application form for a passport is complicated to fill in so you may want to pay a little bit extra and go to your local Post Office who will check you have filled it in correctly.

PAY  IN

Putting money into your account. This could be cash or cheques.

PAYING-IN SLIP

A paying-in slip is a form that needs to be completed when you pay money into your account. You can use it to pay in cash, cheques, or both at the same time. Your bank or building society gives you a book of paying-in slips when you open the account, and there are usually some at the back of your chequebook as well.

PAYMENTS

Money you pay out, for example, on materials you need for your business, interest on loans, money for services such as gas & electricity.

PAYMENT RECEIVED

A sum of money paid into your account to pay off credit, a loan or for services such as gas and electricity. This will be shown on your statement.

PAY PERIOD

The year is divided into equal pay periods starting from early April (which is also start of the tax year). If you are paid monthly, there are 12 pay periods; if weekly, 52.

PAYEE

The person the money is being paid to when you write out a cheque.

PENSION

An income paid out after someone retires. The government gives tax relief on money paid into a scheme designed to provide a pension. A pension is a ‘locked box’ form of savings because you cannot spend any money in the fund until you have reached the minimum age (often 50). You can often take part of the proceeds as a cash lump sum but the rest must be taken as income. There are different types of pension schemes: occupational; Stakeholder; State; personal.

PENSION DEDUCTION

Payments into a pension scheme will be taken automatically from your pay, if you pay into a pension scheme which is arranged by your employer. This will show up on your pay slip as ‘pension deductions’.

PER ANNUM

Each year.

PERSONAL LOAN

Many different companies offer personal loans. These are usually loans that you can use to pay for whatever you want. But as with all loans, make sure you check the interest rate and conditions first.

PERSONAL PENSION

A pension plan, not tied to a particular employment, that you can keep going even if you change job. You might have set up the plan yourself direct with a pension provider or it could have been arranged through your workplace. Some personal pensions are Stakeholder schemes.

PET INSURANCE

Vets’ bills can be very expensive - so some people like to take out insurance against their pet falling ill. Premiums start at just a few pounds each month - but get more expensive as your pet gets older, just as with humans.

PHONE SERVICE PACKAGES

Most phone companies offer different service packages to suit different customers’ needs. These may offer different rates for national and international calls, for instance. Most have trade names like BT Together.

PIN

PIN stands for Personal Identification Number - a four-digit number for you to memorise and keep secret, which you use with a cash machine card. The PIN is for security. It’s like an electronic signature - it identifies you and stops anyone else using your account. Never keep your PIN with your card (it’s best not to keep it written down at all), and never tell it to anyone else - not even bank staff.

P.M.

It means ´post meridiem´ which is Latin for ´after noon´.

POLICY

Policy is another word for plan or cover. When you take out an insurance policy, you receive a contract from the insurance company telling you the kind of events you’re covering yourself for, and how much money the company is prepared to pay out.

PREMIUM

The amount you have to pay to buy the insurance. You may be able to pay in monthly instalments.

PRIORITY DEBTS

These are debts which are more important than others because the law lets the people (you owe the money to) take serious action against you. Priority debts include things like a mortgage because your home could be repossessed if you do not keep up your mortgage repayments and fuel bills because your gas or electricity could be cut off.

PROFIT AND LOSS

In a business, you make a profit if you sell goods or services for more than your costs. You make a loss if the proceeds are less than your costs.