UK personal finance glossary

Plain-English definitions for the jargon you'll meet on payslips, mortgage offers and product info documents.

Annual Equivalent Rate — the standardised rate used to compare savings accounts, accounting for compounding.

Annual Percentage Rate — the headline rate for credit cards and loans, including most fees.

Benefit in Kind — taxable value of perks like a company car or private medical insurance.

Financial Conduct Authority — the UK regulator. Only FCA-authorised firms can give regulated financial advice.

Individual Savings Account — tax-free wrapper for cash or investments. £20,000 annual allowance.

Land & Buildings Transaction Tax — Scotland's equivalent of stamp duty.

Lifetime ISA — pays a 25% government bonus on up to £4,000/year for first-home or retirement saving.

Land Transaction Tax — Wales's equivalent of stamp duty.

Loan-to-Value — your mortgage as a % of property value. Lower LTV usually unlocks better rates.

National Insurance — Class 1 for employees: 8% / 2%. Funds State Pension and benefits.

Pay As You Earn — system whereby employers deduct tax and NI before paying you.

Stamp Duty Land Tax — property purchase tax in England & Northern Ireland.

Self-Invested Personal Pension — DIY pension with broad investment choice.

Government pension paid from State Pension age. Full new amount for 2026/27 ≈ £230.25/week.

HMRC code that tells your employer how much tax-free pay you get. Default: 1257L.