Hancock annuity

An annuity for an employee, former employee or dependant purchased at or after the employee's retirement, death or leaving service. It is called after a decided tax appeal, which allowed the full purchase price for tax purposes in the year of payment.

Hedge fund

An investment fund that takes a higher than normal degree of risk, often using borrowed money, in the hope of achieving a high absolute return.

Hedging

A strategy aimed at reducing potential losses in an investment. An example would be a forward transaction in a currency at an agreed future price to protect against exchange rate fluctuations.

Hybrid scheme

A scheme which combines features of two or more types of pension design e.g. a defined benefit scheme with a defined contribution element.