LEARN · JARGON BUSTER
Money comes with its own language, and most of it is designed to sound more complicated than it is. This glossary breaks down the terms you’ll actually run into, in plain English, so you can get on with the conversation that matters.
ANNUAL EQUIVALENT RATE
What your savings actually earn over a year once compounding is counted, not just the headline rate. It’s the number that lets you compare accounts on equal terms.
Example: an account paying interest monthly will show a slightly higher AER than one paying the same rate just once a year.
ANNUAL PERCENTAGE RATE
The yearly cost of borrowing, with interest and most fees rolled into a single percentage. It exists so a cheap-looking rate can’t quietly hide expensive charges.
Example: two credit cards might quote similar interest rates, but the one with the lower APR is the cheaper deal overall.
WHO INHERITS YOUR ASSETS
The person or organisation you name to receive money, property or other assets from a will, a pension or a life insurance policy. Naming one directly means things usually pass on faster and more clearly.
Example: keeping the beneficiary on an old pension up to date matters just as much as writing the will itself.
THE SNOWBALL EFFECT
Interest earned on your interest, not just on the money you originally put in. Time does most of the work, and it builds up on debt just as reliably as it does on savings.
Example: savings left untouched for ten years grow by more than ten years of simple interest would suggest.
THE FAMILY MONEY DASHBOARD
The single screen where your family’s accounts, property, pensions and loans all come together in one view. Dosh plus dashboard: the one bit of jargon on this page we made up ourselves.
Example: one screen instead of five banking apps and a spreadsheet nobody’s updated since March.
YOUR SHARE OF THE HOUSE
What your home is worth minus whatever is left on the mortgage. It’s the slice of the property that genuinely belongs to you, and it grows as you repay or as prices rise.
Example: a £300,000 home with £180,000 still owed on it leaves you with £120,000 of equity.
YOUR FINANCIAL SAFETY NET
Your household’s ability to absorb a shock, a job loss, a broken boiler, an unexpected bill, without everything else falling over. It depends less on what you earn than on what you’ve set aside.
Example: an emergency fund covering a few months of essential costs is the simplest place to start.
LOCKED-IN INTEREST
A rate that stays put for an agreed period, so your payment is the same every month whatever the Bank of England does. Certainty now, in exchange for a decision to make when the deal ends.
Example: a two-year fix shields you from rate rises, but you won’t feel the benefit if rates fall.
INHERITANCE TAX
Tax charged on the value of what you leave behind when you die, above a threshold set by the government. Whether it applies, and how much, depends on the size of your estate and who inherits it.
Example: a family home passed to children can fall within IHT depending on the estate’s total value.
INDIVIDUAL SAVINGS ACCOUNT
A tax-free wrapper for your savings or investments: no tax on the interest, dividends or growth inside it, up to an allowance set each year by the government.
Example: gains in a Stocks and Shares ISA stay outside capital gains tax, as long as you stay within the yearly limit.
YOUR DEBTS, ADDED UP
Everything you owe: mortgages, loans, credit card balances and anything else you’re contracted to pay back. They sit opposite your assets, and the gap between the two is your net worth.
Example: a car on finance and an outstanding student loan are both liabilities.
WHAT YOU’RE ACTUALLY WORTH
What you own minus what you owe: savings, property, pensions and investments, less mortgages, loans and other debts. It’s the number that shows how your finances are really doing.
Example: a household with a valuable home but a large mortgage can be worth far less than the house price suggests.
SECURE ACCOUNT SHARING
A regulated UK system that lets apps read your account information with your permission, without ever seeing your password. You choose who gets access, and you can switch it off whenever you like.
Example: a budgeting app pulling balances from several banks so you see everything in one place.
YOUR RETIREMENT SAVINGS
All the money saved for later life, usually scattered across every workplace scheme you’ve paid into plus anything private. Tracking the pots down and seeing them together is often the hardest part.
Example: five jobs over twenty years can easily mean five separate pots you’ve lost sight of.
THE INSURANCE PRICE
What you pay for insurance cover, usually monthly or yearly. It’s priced on how likely the insurer thinks a claim is, and it has a habit of creeping up quietly at renewal.
Example: letting a policy auto-renew often costs more than shopping the same cover around.
STANDARD VARIABLE RATE
The default rate your mortgage falls onto once an introductory deal ends. Your lender sets it and can move it whenever they choose, often well above what you were paying before.
Example: if a two-year fix finishes and you don’t remortgage, you’ll land on the SVR and a bigger monthly payment.
TRACKER MORTGAGE
A mortgage rate that follows the Bank of England base rate up and down, usually at a set margin above it. Cheaper than a fix at times, but your payment can move with little warning.
Example: a base rate rise of 0.25% feeds straight through to what you pay each month.
Our blog goes deeper on all of it, and the Help Centre answers the practical questions.
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