📖 UK Finance Glossary

The yearly interest rate charged on a balance to borrowers, or paid to investors.

• See also
• Bond

An item of value.

• See also
• Depreciation
• Residual Value

• Learn more
• Capital Gains Tax guide

A non-cash benefit of monetary value that your employer provides. It is then taxed as though it were income.

ExampleHealth insurance provided by your employer.

• See also
• Gross Income

• Learn more
• Income Tax guide

A loan to a company or government. The investor who buys the bond is paid a fixed rate of return (interest) over a set timeframe.

• See also
• Gilt
• Annual Percentage Rate

• Learn more
• Investments guide

A tax on the profit when you sell (or dispose of) something that has increased in value, such as an asset.

• See also
• Asset
• Individual Savings Account

• Learn more
• Capital Gains Tax guide

How much an asset’s value falls over time.

ExampleA car is worth less every year you own it.

• See also
• Asset
• Residual Value

If you leave a mortgage agreement before the agreed fixed period ends, your lender will likely charge you a fee.

• See also
• Mortgage

• Learn more
• Re-mortgaging guide

An investment that pools money from lots of individuals. The fund manager invests it in a wide range of assets, such as shares, bonds and property. You hold units of the fund, rather than investing directly in company shares.

• See also
• Share
• Bond

• Learn more
• Investments guide

Simply a word for a UK government bond.

• See also
• Bond

• Learn more
• Investments guide

Income of all types before any taxes are taken off.

• See also
• Net Income

• Learn more
• Income Tax guide

The UK Government department responsible for collecting taxes.

• See also
• National Insurance
• Value Added Tax
• Capital Gains Tax

• Learn more
• Personal Tax guide

A scheme that lets you hold cash, shares and unit trusts free of tax on the interest, dividends and capital gains you earn.

• See also
• Capital Gains Tax
• Share

• Learn more
• Stocks & Shares ISA guide

The size of a mortgage compared with the value of the property, shown as a percentage or a ratio.

• See also
• Mortgage

• Learn more
• What is a mortgage?

A loan to buy a property, secured against the value of that property.

• See also
• Loan-to-value
• Early Repayment Charge
• Stamp Duty Land Tax

• Learn more
• What is a mortgage?

A tax paid to contribute towards state assistance (benefits) and the state pension.

• See also
• HMRC

• Learn more
• National Insurance guide

Income of all types after tax has been taken off.

• See also
• Gross Income

• Learn more
• Income Tax guide

An insurance product that helps make sure credit is repaid if the borrower can’t repay it themselves, for example through death or illness.

Essentially the re-sale value of an asset after a period of time.

ExampleWhat a car might sell for after three years.

• See also
• Asset
• Depreciation

A slice of ownership in a company. If you buy a share you become a shareholder and may receive a dividend. The share price can go up or down.

• See also
• Fund
• Individual Savings Account

• Learn more
• Investments guide

Tax paid when you buy a property.

• See also
• Mortgage

• Learn more
• Stamp Duty guide

A tax on goods and services, paid by the end customer.

• See also
• HMRC