Your pocket guide to understanding financial terms

1 Your pocket guide to understanding financial terms financial Literacy Programme A NALA/EBS Partnership Foreword adult basic education, the organisations are working jargon which is used on a daily basis in relation to together to help tackle all aspects of the money financial literacy and to business. This resource address the issue of access will also give guidance to The EBS Building Society As an organisation founded to financial products and management and staff who partnered with the National on the principles of services for those with work in the financial services Adult Literacy Agency mutuality with a long literacy and numeracy sector, money advisers, the (NALA) to develop a heritage in providing difficulties. Government, regulators programme, which would educational support, EBS and utility companies in help to target the growing understands that family This A-Z pocket guide to explaining phrases used issue of family and financial literacy development is understanding financial by them.

2 Literacy. Prior to entering the particularly important, as terms is just one of the partnership, EBS recognised parents are the first and achievements of EBS's financial decisions are that many challenges existed most constant educators partnership with NALA. among the most important in tackling the barriers to of children. Family literacy Having launched it originally that are made by people family and financial literacy. encourages parents and in 2004 we have now during their lifetime and it is In today's society, the children to work together to updated it with modern our collective responsibility availability of increasingly improve both their terminology to meet with to provide better tools to complex financial products literacy skills. the increasing demand for assist people in making and the growing need to the book. The guide is an those decisions. We hope be financially self-sufficient In bringing together the important resource that you enjoy and learn from means that people must financial and customer will help to create a much this book.

3 Be increasingly financially expertise of EBS with NALA's greater understanding of literate. specialist knowledge of the dense and obscure 2 3. Aa Accurate figure An exact reading from a Affinity card A credit card that allows Annual Every year meter to record how much a person to support an Accidental damage Annual cover gas or electricity a person organisation such as a Damage to a person's An insurance policy that a has used charity; every time a possessions by accident, person must renew every person uses the card to buy such as spilling paint on a Actuary year, such as health or something, the credit card carpet, that is covered An expert on pension car insurance company makes a small by some home scheme assets and debts, donation to the organisation Annual management insurance policies life expectancy and risk for charge Aa Aa Account insurance purposes After tax An amount of money that a A charge or fee that a A record of spending and Acquisition person must pay each person is left with after they income, provided by a The buying of one company year to the manager of an have paid tax bank, post office or by another.

4 Also known as insurance policy, investment building society a takeover Agent or pension fund, based on A person who deals with a the value of a person's fund Accounting date Administration fee range of suppliers from The last date of the period An amount you pay for the Annual service which it can issue a covered by an organisation's time it takes staff to make A check made once a recommendation to a client annual accounts changes to your financial year on a piece of Accumulation date product or service All risks equipment to make sure A home insurance policy it is working properly The date when income is AVC that covers a person's reinvested in a unit trust, Additional Voluntary Annuity possessions even if they take instead of being paid out Contribution extra money A regular amount paid them outside their home to investors that people in work related out to somebody from an Accumulation unit pension schemes can pay to Allocation rate investment that is linked to increase their pension benefits A percentage of a person's a managed fund A type of unit of income that money that has been a company reinvests in a Applicant invested in a fund; the unit trust instead of paying it A person who applies remainder is spent out immediately to investors for something on charges 4 5.

5 APR. Annual Percentage Rate a shareholders' rights and the directors' powers Audit An independent examination Bb percentage to show the of an organisation's records Asset Balance amount of interest and other and accounts to make Something owned An amount of money, shown fees a person pays each year sure that they show a fair, on a person's statement, to receive a loan Asset management accurate and legal reflection that they have in their A service from a financial of the financial position ARF account or that they owe adviser to spread a person's of the company at the Approved Retirement at any time investment between a accounting date Fund an investment plan number of assets, such Balance brought Bb Aa that self-employed people, Auditor's report directors of family firms as shares, Government A report by an independent forward bonds, cash and property, so An amount shown on a and certain other people person or firm on that they can potentially person's last statement can buy with the proceeds an organisation's earn more money that is brought forward to of their pension plan when financial records the next statement, either they retire, which they can Asset management allow to grow or can cash in Insurance cover for an event Authorised share to show money saved or capital money owed from time to time to that will definitely happen, The highest amount of share provide an income such as death, rather than Balance transfer an event that might happen, capital that a company An amount a person owes Arrangement fee such as fire or theft can issue.

6 As set out by the on one credit or store card A fee that a bank or building company's memorandum that they can switch to society charges a customer ATM of association another credit card for arranging a loan Automated teller machine a computerised machine Available credit Balance sheet Arrears that allows bank customers The difference between a A summary of a company's An overdue amount that has person's credit limit and the to get information on their assets (what a company not been paid amount of money they have bank account, withdraw owns) and liabilities (debts already borrowed or spent Articles of association money or sometimes top a company owes) at a up their phone in a public on their credit card A company's document point in time that sets out the place, without dealing with another person 6 7. Balloon payment Barter Benefit-in-kind unit if they cash them in A higher than normal final A way of paying for things A perk' of a job, such Bond payment for a loan in return by exchanging goods and as a company car, gym A written promise made by for lower regular repayments services instead of money membership or health governments and companies insurance, that a company Bank Basic bank account gives to its employees or to repay any money An organisation that invests A service from a bank or borrowed, with interest, on directors and that may and lends money building society that only a certain date in the future be subject to tax lets a person spend what Bank identifier code Bonus issue they have in their account so Bequest An offer of free shares to A bank's unique code, which Bb Bb there is no risk of becoming Something, usually property, is used when transferring a company's shareholders.

7 Overdrawn and running up given in a will money between banks, related to the number of overdraft charges especially in different BIC shares they already have countries, and when Bear Bank Identifier Code a Book value exchanging messages; Someone who sells shares unique address which, The value of a fixed asset, sometimes found on now, expecting the share in telecommunication such as a building or account statements price to fall in the future so messages, identifies machine, after depreciation, they can buy the shares back precisely the financial Bankrupt later at a lower price institutions involved in as recorded in an A situation of not having organisation's accounts financial transactions enough money to pay debts, Benefactor Books of account declared by a court order A person who gives a gift, Bid/offer spread Books that a business must for example in a will An initial investment charge Bankruptcy that refers to the difference keep to record its financial A type of order issued by a Beneficiary between the buying and transactions accurately court when a person cannot A person who receives a gift selling price of a unit on the Booking fee pay their debts when they Benefit statement stock market on any An amount a person pays are due, which allows the A statement, usually given day to book something, for person's property to be sold issued once a year, of example a concert or plane to raise money to pay Bid price ticket, to cover a company's the value of a person's their creditors The price that an investor in occupational pension administrative costs a unit trust can get for each 8 9.

8 Borrow Budget Bureau de change than out of the income Get money that will be A plan of spending over A place that changes all it has generated paid back a certain length of time, major foreign currencies, Capital expenditure based on how much money in cash or in travellers'. Bounced cheque a person has cheques, for a fee known Money a business spends on A cheque that the bank buying or improving its fixed as a commission refuses to pay out because Budget deficit assets, such as equipment or furniture Cc the person who wrote A gap that occurs when a the cheque does not have body, often a government, Capital gain enough money in their plans to spend more money Calendar month Money a business or person Bb Cc account to pay for it than it takes in A period of time that starts makes if it sells a long-term Breach of contract Building society on the first day of the month asset, such as a building, for An act that breaks a legal An organisation owned by and ends on the last day, as more than it cost duty agreed in a contract its members.

9 Who are some opposed to starting in the Capital gains tax or all of the customers middle of one month and Break even saving with or borrowing A tax on gifts over a certain ending in the middle of value or on a capital gain. A point at which a company from the society the next earns as much money as it is Capital guarantee spending; with no profit or Buildings insurance Cancellation rights An investment that loss, it breaks even' An insurance policy that A person's or company's guarantees that, at the end pays out if a person's right to cancel a contract Bridging loan home is damaged, for of the agreed term, a person A loan given by a lending Capital will get back at least the example if tiles fall off a roof institution to bridge' a time An amount of money a amount they invested during a storm difference between buying person saves, invests or Capped charge a new home and selling the Bull borrows, before interest The most that a pension existing home Someone who buys shares or loss provider can charge a now, expecting that their Brokerage Capital charge person for managing value will rise in the future Commisson earned by a A charge that a unit trust their pension.

10 Usually a so that they can sell the broker or a broker's business manager takes out of the percentage of the value of shares for a profit at fund's capital rather a person's fund a later date 10 11. Car insurance their balance or print out a Charges of money on a cheque (up to Insurance that a person mini-statement Fees and interest that a certain limit) will be paid needs before driving a a person must pay, for whether or not there Cash inflow is enough money in vehicle, which, depending example when they borrow The amount of money on the type of insurance, money or buy on credit the account coming into a business pays them a certain amount Charge card *Child dependant if their car is stolen and pays Cash outflow A child up to age 18 who A type of credit card a sum towards repairs if the The amount of money often issued by a store to its normally lives with and car is damaged due to an leaving a business customers so that they is being supported by an accident or fire Cc Cc Cashflow can buy goods from the adult, or a child up to the Cash advance A record of all the money store on credit age of 22 who is in full- A cash withdrawal using a coming in minus all the time education by day at a credit card.