Glossary beginning with O

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O

Occupational pension: An occupational pension is also known as a company or employer’s pension scheme: they’re only available through employers. There are two types of occupational pension schemes, final salary schemes and money purchase schemes.
Open market option: You don’t have to buy an annuity from your pension fund provider – you can ‘take the open market option’. This means shopping around, or asking an independent financial adviser to do the search for you, to compare rates and arrangements offered by other annuity providers. You’ll sometimes see the abbreviation ‘OMO’.
Open-ended investment companies (OEICs): An open ended collective investment trust invests in many types of different investments. The OEIC manager must create shares when money is invested and redeem shares as requested by shareholders.
Overdraft: An overdraft Is usually a borrowing facility that’s linked to a current account provided by your bank. If the bank hasn’t agreed an overdraft with you, or if you exceed your agreed overdraft, you’ll probably pay additional interest and/or a penalty.