Ringfencing

If you’re putting money aside for your "issue" (legal term for kids), you’re kind of ringfencing it.

Ringfencing applies to companies, though. Individuals...not so much. Ringfencing is when some money (or assets) are separated from everything else, but not necessarily officially (as in: not on paper as a separate entity).

A company might want to ringfence some money as a safety blanket, or as a way to lower taxes. More commonly, ringfencing happens for regulatory reasons. Public utility businesses, like water and power firms, are oftentimes required to ringfence. It helps keep these services that run our society stable in times of instability. It also keeps information private, away from for-profits looking for data that could lead to more profits.

Ringfencing can actually be a good thing for investors, too. It implies stability and safety in related bonds and investments.

Example:

Enron acquired Oregon’s Portland General Electric, which was ringfenced. Then Enron went under, but the entire Portland GE made it out solvent-okay, since it was ringfenced from Enron.