Glossary: every term, in plain words

Jargon is not an accident. A subject kept behind unfamiliar words is a subject most people give up on, which suits some people fine. Here is every term this site uses, in language a 13 year old can carry away. No term on this list is beyond you.

A to C

Airtime. The half of a pay monthly phone contract that buys calls, texts and data. It is a service rather than a loan, which makes it the half that does not sit on your credit file. Full page.

Amortisation. The way a repayment loan is split between interest and paying off the debt. Interest is charged on what you still owe, so early payments are mostly interest and late ones are mostly debt. Same payment, completely different job. Full page.

APR (annual percentage rate). The yearly cost of borrowing, interest plus compulsory fees, as one comparable percentage. Roughly: £10 a year per £100 owed, for every 10% of APR. The most important number on any credit deal. Full page.

Asset manager. A company that invests other people's money for a fee: pensions, ISAs, savings. The biggest ones manage trillions and, through that, end up holding large stakes in most large companies. You may already be one of their customers without knowing it. Full page.

Auto-enrolment. The UK rule that puts most employees into a workplace pension automatically once they qualify, with money from you, your employer and tax relief. You can opt out. Opting out means turning down the employer's share. Full page.

Badges of trade. HMRC's own nine part test for whether you are running a business or just selling your own things. Did you buy it in order to sell it, do you do it over and over, did you change it to make it worth more. No single badge decides it: it is the overall impression. Full page.

Balance transfer. Moving credit card debt to a new card charging 0% for a fixed window, for a one-off fee. The debt does not shrink; only the interest pauses. Full page.

Bank of England. The UK's central bank, founded 1694: it issues the notes, sets the base interest rate, and referees the banking system. Its own bulletin is the source for this site's central claim. Full page.

Banking licence. Legal permission to call yourself a bank and take deposits. Getting one takes years, millions in capital, and approval from the Bank of England and its partner regulator. That difficulty is the moat around the whole industry. Full page.

Base rate. The interest rate the Bank of England sets, 3.75% since 30 July 2026, which everything else is priced from. When it moves, mortgages, savings and loans follow, unevenly and usually in the bank's favour.

Basic bank account. A stripped down current account for people who cannot get a standard one. No fee, no minimum deposit, wages in and direct debits out, and no overdraft. If a bank turns you down, ask for this one by name. Full page.

Beneficial owner. The human being who really owns something, as opposed to the company whose name is on the paperwork. Whole industries exist to keep those two names apart. Full page.

BNPL (buy now, pay later). Splitting a purchase into instalments at the checkout, usually interest free. The trap is design, not rates: stacked plans that nothing adds up for you, late fees, and credit file marks. Regulated as credit in the UK since 15 July 2026. Full page.

Central bank reserves. The money banks hold at the Bank of England to settle with each other. You cannot have any: it is a separate kind of money, in a system ordinary people are not admitted to. Full page.

Cifas marker. A warning placed on the National Fraud Database and read by hundreds of banks, insurers and phone companies. It lasts six years, and it can close accounts and block credit long before any court is involved. Full page.

Compound interest. Interest charged on top of earlier interest, so debts and savings both snowball. The force behind every scary and every happy number on this site.

Conveyancing. The legal work of transferring a property from one owner to another: searches, contracts, registration. Commonly up to about £1,800 for a buyer, and one of the costs no deposit calculator includes. Full page.

Credit. Spending money now that you must hand back later, with interest. Renting money. Not extra income, not a favour, not free. Full page.

Credit file / credit report. The record three private agencies keep about your borrowing: accounts, payments, addresses, applications. Lenders read it before deciding on you. Yours to check free, and to correct. Full page.

Credit reference agency. A company that keeps a file on your borrowing and sells lenders access to it. Three big ones in the UK, Experian, Equifax and TransUnion, plus a fourth called Crediva. Each holds slightly different information, which is why your score changes depending on which app you open. Full page.

Credit score. A number summarising your credit file. Experian scores out of 1250, Equifax out of 1000, TransUnion out of 710, and lenders use their own private versions anyway. The file matters more than the number. Full page.

Credit union. A community lender owned by its members rather than shareholders, with loan rates capped by law. Small, local, and built to be what the expensive short-term lenders pretend to be. Full page.

CREST. The electronic system where UK share holdings are settled and recorded, run by Euroclear UK and International. It is why almost nobody holds a paper share certificate any more, and why your name is not the one on the register. Full page.

Crown Dependency / Overseas Territory. Places like Jersey, Guernsey, the Isle of Man, the Cayman Islands and the British Virgin Islands: linked to the UK, not part of it, and running their own financial and tax rules. A large share of the world's offshore money sits in that gap. Full page.

D to F

Debasement. Making each unit of money worth less: once by putting less silver in coins, now by creating money faster than the things it buys. £1 of 1971 does the work of about 5p today. Full page.

Deposit (house). The share of a home's price you pay upfront, usually 5% to 25%, with better mortgage rates at each step up. About £23,000 for a typical 10%, and roughly six years of saving. Full page.

Deposit (rental). The money a landlord holds against damage, capped at five weeks' rent below £50,000 a year and six above. It must be protected in one of three government schemes within 30 days, and returned within 10 days once the amount is agreed. Full page.

Depreciation. The value a thing loses just by getting older, whether you use it or not. It is usually the biggest cost of owning a car and it never appears on a bill, which is exactly why people forget to count it. Full page.

Device plan. The loan half of a pay monthly phone contract: what you owe for the handset, repaid monthly, usually at 0%. It is a credit agreement, it needs a credit check, and it goes on your credit file. Full page.

Direct debit / standing order. Instructions that pay automatically from your account. Boring, and the single most powerful anti-trap tool on this site: automated payments never forget, and forgetting is what the expensive rates are priced on.

EAR (effective annual rate). The overdraft's version of APR: the yearly cost of borrowing with the compounding already included. A balance sitting there for a whole year costs you that percentage of it, so no translation is needed. Full page.

Equity. The part of a property you actually own: its value minus what you still owe on the mortgage. It grows as you repay the debt and as prices rise, and it shrinks when prices fall. Full page.

Excess. The amount you pay yourself before an insurer pays anything, on every claim. There is often a compulsory excess plus a voluntary one you chose, and they add together. Full page.

Fiat money. Money that is money because the state says so and everyone accepts it, rather than being made of or backed by something like gold. All major currencies since 1971. Full page.

Financial association. A link between your credit file and someone else's, created by holding something jointly such as an account or a loan. Once it exists a lender looking at you can pull their file too, and it does not vanish when the account closes: you have to ask for it to be broken. Full page.

Freehold and leasehold. Freehold means you own the building and the ground under it outright. Leasehold means you own the right to live there for a fixed number of years, usually with a service charge and sometimes ground rent that you do not set. Full page.

Fronting. Telling a car insurer that a parent is the main driver when a young person really is. It is a false declaration, which makes it fraud: the claim can be refused, the policy voided, and prosecution means a criminal record. Full page.

FSCS protection. The UK scheme that protects bank deposits if a bank fails: up to £120,000 per person per authorised firm, raised from £85,000 in December 2025. Why your balance is safe even though it is only a promise.

G to M

Guarantor. Someone, usually a parent, who signs to cover your rent if you do not pay it. On a shared tenancy the guarantee can reach the whole rent rather than just your share, unless the agreement says otherwise. Full page.

Hard search / soft search. Two ways your credit file gets looked at. Soft searches (checking your own score, eligibility checkers) are invisible to lenders and harmless. Hard searches (real applications) are visible and read badly in clusters. Full page.

Holding deposit. The payment that takes a rental property off the market while referencing happens, capped by law at one week's rent. It comes off your first rent or deposit, and there are only narrow reasons a landlord may keep it. Full page.

Index fund. A fund that simply holds everything in a list, such as every large company on an exchange, instead of picking winners. Cheap, enormous, and the reason a handful of managers end up on the share register of almost everything. Full page.

Inflation. Prices in general rising, so each pound buys less. Measured by CPI, 2.9% in the year to July 2026, targeted at 2% on purpose. The same event as debasement, seen from the shop shelf. Full page.

Joint and several liability. On a shared tenancy every tenant is responsible for the whole rent, not their share of it. If a housemate stops paying, the rest of you owe what they did not. Shelter's wording: "You are all responsible for the whole rent even if you pay different amounts." Full page.

Lifetime ISA. A savings account for a first home or retirement: up to £4,000 a year with 25% added by the government. The property must cost £450,000 or less, a cap unchanged since 2017, and taking the money out for anything else costs 25% of the whole pot. Full page.

Loan to value (LTV). How much of a property's price you are borrowing, as a percentage. A 10% deposit is a 90% LTV. Rates step down at each band, which is why deposit size changes the price of the money, not just the size of the loan. Full page.

Master account. An account at the Bank of England that lets a firm settle payments directly instead of through another bank. Without one you are a customer of your competitors. Deciding who gets one is a quiet form of power. Full page.

Minimum payment. The smallest amount a card lets you pay monthly. Engineered so the debt survives: at high APRs the minimum can lose to the interest forever. Always beat it. Full page.

Money mule. Someone who lets money move through their bank account for a cut. It is money laundering under the Proceeds of Crime Act 2002, carrying up to 14 years, and "I did not know" is weaker than people assume, because the offences cover suspicion. Full page.

Money supply (M4). The official measure of all UK money: about £3,309 billion in June 2026, of which notes and coins are only about £105 billion. The other 97% is numbers in accounts, mostly born as bank loans. Full page.

Mortgage. A decades-long loan for buying a home, secured on the home itself: stop paying and the bank can take the house. Literally "dead pledge" in old French. Full page.

N to Z

Narrow bank. A bank that only holds deposits and does not lend, so it never creates money. Several have tried to open in the UK. The system has not made it easy, which tells you something about what banks are for. Full page.

Nominee account. An arrangement where shares are legally held in a broker's or custodian's name on your behalf. Convenient, and it means the name on the share register is almost never the name of the actual owner. Full page.

Offshore financial centre. A place that sells secrecy, low tax, or light regulation to money from somewhere else. Not always illegal, frequently not visible, and much of it operates in the shadow of larger countries rather than against them. Full page.

Ombudsman. A free, independent service that settles complaints between customers and firms when the firm's own complaints process has failed. Using one costs you nothing and the decision binds the firm.

Overdraft. Your bank letting your account go below zero, for a price: around 39.9% EAR at the big banks, dearer than the average credit card, wearing a friendly name. App banks and building societies charge a good deal less for exactly the same thing. Full page.

Periodic tenancy. A tenancy that rolls on month to month with no fixed end date. Since 1 May 2026 every new assured tenancy in England is periodic: fixed terms are gone, and you give two months' notice to leave. Full page.

Personal allowance. The amount you can earn in a tax year before income tax starts, £12,570. Your wage uses it up first, which is why money earned on the side is usually taxed from the first pound above the trading allowance. Full page.

Premium. What you pay an insurer to be covered. It is their estimate of how likely a claim is multiplied by what it would cost them, not a judgement on you personally. Full page.

Representative APR. The advertised rate only at least 51% of accepted customers must actually get. The other 49% can be offered worse, and young borrowers with thin files often are. Always check your own offer. Full page.

Section 75. The protection that makes a lender jointly liable with the shop on purchases from £100 to £30,000: if the thing never arrives, arrives broken, or the shop goes bust, you can claim against either. Long standing on credit cards, and extended to buy now pay later from 15 July 2026. Below £100 you get none of it. Full page.

Security entitlement. The American legal name for what you actually hold when you buy shares through a broker: a claim on your share of a pool, rather than a claim on any particular share. The UK arrangement works the same way with different words. Full page.

Self Assessment. The tax return you file when tax is not all collected through your wage. Tell HMRC by 5 October after the tax year ends, file online by 31 January, and pay on the same day. The penalties start automatically. Full page.

Share register. The official list of who owns a company's shares. Because most shares are held through nominees and funds, the register usually shows custodians rather than the people whose money it is. Full page.

Shared ownership. Buying between 10% and 75% of a home and paying rent on the rest to a housing association. A real route in, usually leasehold, with a service charge, and not the same thing as owning. Full page.

Shell company. A company with a name, an address and no real business. Perfectly legal to own. Useful for holding things, and equally useful for hiding who is holding them. Full page.

Stamp duty. The tax on buying property. In England and Northern Ireland a first time buyer pays nothing up to £300,000 and 5% from £300,001 to £500,000, with no relief at all above £500,000. Full page.

Statutory credit report. The file a credit reference agency holds on you, which by law it has to give you free. It is not the same thing as the score an app sells you, and it is far more useful, because it is what lenders actually read. Full page.

Student loan plan. Which set of repayment rules you are on, decided by where and when you started studying. Plan 5 repays 9% of income above £25,000 and is written off after 40 years; Plan 2 above £29,385 and 30 years. The size of the balance never changes the payment. Full page.

SVR (standard variable rate). The expensive default rate a mortgage slides onto when a fixed deal ends and nobody acts: averaging 7.34% against about 5.24% for a fix. The forgetting tax. Full page.

Tax code. The short code on your payslip that tells your employer how much of your pay to leave untaxed. If it ends W1, M1 or X, or reads BR or 0T on a single job, it is probably wrong, and nobody writes to tell you. Full page.

Telematics (black box). Car insurance priced on your own recorded driving rather than your age group. It can cut the bill for a careful new driver, and the terms decide what happens when the box records something the insurer dislikes. Full page.

Thin file. A credit file with almost nothing on it, which is what nearly everyone has at 18. It is not a bad file, it is an empty one, and a lending machine with nothing to predict from tends to say no. Full page.

Tracker fund. Another name for an index fund: it tracks a list rather than picking. Also used for tracker mortgages, which follow the Bank of England base rate up and down. Same word, two different things, both worth knowing. Full page.

Trading allowance. The first £1,000 of trading income each tax year, with no tax and nothing to declare. It is income, not profit: £1,200 of sales on stock that cost £900 still puts you over it. Full page.

Questions people ask

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Last checked 26 August 2026. Figures are re-verified whenever this page is updated.