Glossary
Money jargon, explained in plain English.
- Accumulation fund
- A fund that reinvests any income, such as dividends, automatically instead of paying it out. Learn more
- Automatic enrolment
- The law that requires employers to put eligible workers into a workplace pension. Learn more
- Bond
- A loan to a government or company that pays you interest. Learn more
- Budget
- A plan for your money that shows what comes in, what goes out and what's left over. Learn more
- Capital gain
- The profit you make when you sell an investment for more than you paid for it. Learn more
- Compound interest
- Growth earned on your past growth, not just on the money you put in. Learn more
- Credit report
- A record of how you've handled credit and bills, held by credit reference agencies. Learn more
- Diversification
- Spreading your money across many investments to reduce the impact of any one doing badly. Learn more
- Dividend
- A share of a company's profits paid to its shareholders. Learn more
- Emergency fund
- Cash set aside for unexpected costs, usually three to six months of essential spending. Learn more
- ETF
- An exchange-traded fund. A fund that's bought and sold on a stock exchange, like a share. Learn more
- FSCS
- The Financial Services Compensation Scheme, which protects your money if an authorised financial firm fails, up to set limits. Learn more
- Gross pay
- What you earn before any deductions. Learn more
- Index fund
- A fund that aims to match the performance of a market index, such as the FTSE 100. Learn more
- ISA
- An Individual Savings Account. A savings or investment account where you don't pay tax on interest, income or gains. Learn more
- ISA allowance
- The most you can pay into ISAs each tax year: £20,000 in 2026/27. Learn more
- Lifetime ISA
- An ISA you can open between the ages of 18 and 39 that adds a 25% government bonus for a first home or later life. Learn more
- National Insurance
- A deduction from your pay that builds your entitlement to the State Pension and some benefits. Learn more
- Ongoing charges figure (OCF)
- The yearly cost of running a fund, shown as a percentage of your investment. Learn more
- Personal Allowance
- The amount you can earn each tax year before paying Income Tax: £12,570 for most people in 2026/27. Learn more
- Personal Savings Allowance
- The amount of savings interest you can earn tax-free each year: £1,000 for basic-rate and £500 for higher-rate taxpayers. Additional-rate taxpayers get none. Learn more
- Qualifying earnings
- The part of your pay used to work out minimum workplace pension contributions: between £6,240 and £50,270 a year in 2026/27. Learn more
- Take-home pay
- What reaches your bank account after all deductions. Also called net pay. Learn more
- Tax code
- A code, such as 1257L, that tells your employer how much tax-free income you get. Learn more
- Tax relief
- Money the government adds or gives back on pension contributions, so saving costs you less. Learn more
- Tax year
- The UK tax year runs from 6 April to 5 April the following year. Learn more