Financial Glossary

A quick-reference guide to common financial terms with short explanations and links to fuller guides on the site where available.

APR

Annual Percentage Rate. A figure that shows the yearly cost of borrowing, including interest and certain fees. Useful when comparing credit cards, loans and other forms of credit.

Asset

Something you own that has value and gives towards your finances. Common examples include savings, investments, property and pensions. Assets can help improve your financial position over time.

Budget

A plan for your money that shows your income and how you intend to spend and save it. A good budget helps you stay in control and make intentional decisions.

Credit Card

A card that lets you borrow money to make purchases and pay it back later. Useful when paid off in full each month, but can become expensive if you carry a balance.

Expense

Money you spend. Expenses are often split into essentials (needs) and lifestyle spending (wants), which helps with budgeting and saving.

Income

Money you receive, usually from work, but also from benefits, side income or investments. Understanding your take-home income is the starting point for any budget.

Insurance

A way of protecting yourself financially against specific risks, such as illness, death, or damage to your home or car, in return for paying a premium.

Interest Rate

The percentage charged on borrowed money or earned on savings. On savings, always compare using the AER where possible.

ISAs

Individual Savings Accounts. A tax-efficient way to save or invest. Interest or growth inside an ISA is free from Income Tax and Capital Gains Tax (within the rules).

Liability

Something you owe. Common examples include credit cards, loans, car finance and mortgages.