Money Terms in Plain English.

B

BacsUK

The slower UK payment system used for most wages and Direct Debits.

In plain English:The system that moves wages, Direct Debits and many bank payments. It takes about three working days.

MoreLess about Bacs

A UK payment system where money takes three working days to arrive.

It's used for most salaries and Direct Debits, where the timing is planned in advance.

For example: An employer sends wages by Bacs a few days before payday, so the money lands on time.

Article inside Foliopeak: How Money Moves: Faster Payments, Bacs and CHAPS

Bad debt reliefUK

Getting back the VAT on a sale a customer never paid for.

In plain English:If you charged VAT on a sale and paid it to HMRC, but the customer never paid you, you can claim that VAT back.

MoreLess about Bad debt relief

If you've paid HMRC the VAT on a sale and the customer never paid you, you can claim that VAT back.

You can claim once the debt is six months overdue and written off in your VAT records.

For example: A builder charged VAT on a job but the client went bust. Six months later, the builder claims the VAT back from HMRC.

Article inside Foliopeak: Writing Off Bad Debts: When a Customer Doesn't Pay

Badges of tradeUK

The signs HMRC uses to decide whether selling things counts as a business.

In plain English:Signs HMRC looks at, like how often you sell and why, to decide if you're just clearing out or actually running a business that owes tax.

MoreLess about Badges of trade

HMRC looks at signs to decide whether buying and selling things is a business: whether you aim to make a profit, how often you sell, whether you bought things to sell on, and whether you improve them first.

Clearing out your own belongings usually isn't trading, so it isn't taxed as a business.

For example: Selling your old clothes on Vinted isn't a business. Buying jackets cheaply to sell for a profit every week probably is.

See also: Trading allowance

Bailiff (enforcement agent)UK

Someone with legal power to collect certain debts, sometimes by taking goods.

In plain English:A person who can visit you to collect certain debts, and in some cases take your things to sell. They must follow strict rules.

MoreLess about Bailiff (enforcement agent)

Someone with legal power to collect some debts, like unpaid Council Tax, fines or court judgments, including by taking goods to sell.

They must give written notice first and follow strict rules about when they can visit and what they can take. In Scotland, sheriff officers do this.

For example: After months of unpaid Council Tax, a bailiff sends a letter giving a date they'll visit unless the debt is paid or a plan agreed.

Bailout and bail-in

Rescuing a failing bank with taxpayers' money, or by making its investors take the loss.

In plain English:In a bailout, the government uses taxpayers' money to save a failing bank. In a bail-in, the bank's investors lose money instead.

MoreLess about Bailout and bail-in

In a bailout, the government puts in taxpayers' money to save a failing bank, as the UK did in 2008. In a bail-in, the bank's shareholders and lenders take the losses instead.

Savers' deposits up to the FSCS limit are protected either way.

For example: In 2008, the UK government put billions into banks like RBS to stop them collapsing.

Article inside Foliopeak: Systemic RiskSee also: FSCS

Balance sheet

A list of what a business owns and owes on one day.

In plain English:A picture of a business on one day: what it owns on one side, what it owes on the other. The difference is what it is worth.

MoreLess about Balance sheet

A list of what a business owns and what it owes on one date, and what's left over for its owners.

The two sides always balance, because what's left for the owners is what's owned minus what's owed.

For example: A café's balance sheet might show its coffee machines and cash on one side, and its bank loan on the other.

Balance transfer

Moving a credit card debt to a new card, often at no interest for a while.

In plain English:You move what you owe on one credit card to another, often to pay no interest for a set time. There's usually a fee for moving it.

MoreLess about Balance transfer

You move a credit card debt to another card, often at 0% interest for a set time, usually for a fee.

When the offer ends, the card's normal rate applies to whatever is left, so the aim is to clear it before then.

For example: Move £3,000 from a card charging 24% to one at 0% for 20 months, paying a 3% fee of £90.

Article inside Foliopeak: Credit Cards and Borrowing: What It Really Costs

Balancing chargeUK

Extra profit added when equipment is sold for more than is left of its cost for tax.

In plain English:If a business sells equipment for more than the value left on it for tax, the difference gets added back to its profit and taxed.

MoreLess about Balancing charge

If a business sells something it claimed capital allowances on for more than is left of its cost for tax, the difference is added back to its profit.

It takes back allowances that turned out to be more than the item really lost in value.

For example: A plumber claimed allowances on a van, then sold it for more than its value for tax, so part of the sale price is added to profit.

Article inside Foliopeak: Depreciation and Capital Allowances: How Equipment Comes Off Your Tax

Balancing paymentUK

The rest of your tax bill once your advance payments are counted.

In plain English:If you pay tax through Self Assessment, you pay some in advance. The balancing payment is whatever is still left to pay once the year is done.

MoreLess about Balancing payment

It's whatever is left of a year's Self Assessment bill once any payments on account are taken off.

It's due by 31 January after the tax year ends, often at the same time as the first payment on account for the next year.

For example: Someone's tax bill was £6,000 and they'd already paid £5,000 on account, so they pay the last £1,000 in January.

See also: Payments on account

Bank of EnglandUK

The UK's central bank, which sets the main interest rate.

In plain English:The UK's central bank. It sets the main interest rate, looks after the banking system and prints the notes.

MoreLess about Bank of England

The UK's central bank. It sets Bank Rate, prints banknotes in England and Wales and keeps an eye on the safety of banks and insurers.

Its main job is to keep inflation low and steady.

For example: When prices rise too fast, the Bank of England raises Bank Rate to cool spending down.

Bank RateUK

The Bank of England's main interest rate, which shapes most other rates.

In plain English:The interest rate the Bank of England sets. When it goes up, mortgages and savings rates usually go up too, and the other way round.

MoreLess about Bank Rate

The Bank of England's main interest rate, set by its Monetary Policy Committee and often called the base rate.

Tracker mortgages follow it, and it shapes what banks pay savers and charge borrowers.

For example: When Bank Rate goes up, tracker mortgages and many savings rates usually go up soon after.

Article inside Foliopeak: Savings Accounts: Comparing Them Properly

Bank run

Many customers rushing to take money out of a bank at once, fearing it will fail.

In plain English:Lots of people fear a bank might fail and all try to take their money out at once, which can make it fail.

MoreLess about Bank run

Many customers rush to take their money out of a bank at once because they fear it will fail, which can make it fail.

Northern Rock had one in 2007. Deposit protection such as the FSCS is there partly to stop them happening.

For example: In 2007, queues formed outside Northern Rock branches as savers rushed to take their money out.

Article inside Foliopeak: Systemic RiskSee also: FSCS

Bank stress test

A check of whether banks could survive a severe crisis.

In plain English:The Bank of England imagines a terrible crisis, like a deep recession, and checks whether each big bank has enough money to get through it.

MoreLess about Bank stress test

A regulator, like the Bank of England, checks whether banks could survive a severe crisis, such as a deep recession and falling house prices.

Banks that fall short must build up more money so they can absorb losses.

For example: The Bank of England imagines house prices falling by a third and checks each big bank would still have enough money.

See also: PRA (Prudential Regulation Authority)

Bank switching bonusUK

Cash a bank offers you for moving your current account to it.

In plain English:Some banks pay you cash to move your current account to them. You usually need to pay in a set amount and move some Direct Debits.

MoreLess about Bank switching bonus

Some banks pay you cash to move your current account to them, usually through the Current Account Switch Service.

There are often conditions, like paying in a set amount each month or moving Direct Debits, and the bonus is only paid once they're met.

For example: A bank offers £175 to switch. The customer moves their account, pays in their wages and gets the bonus a few weeks later.

Article inside Foliopeak: How Money Moves: Faster Payments, Bacs and CHAPS

Bankruptcy

A legal way out of debts you can't pay, with serious effects on your life and credit.

In plain English:If you can't pay what you owe, a court can clear most of your debts, but you may lose things you own and it stays on your credit file for years.

MoreLess about Bankruptcy

A legal process for someone who can't pay their debts. Most debts are written off, but things you own, like a home, may be sold to pay the people you owe.

In England and Wales it usually ends after a year, but stays on your credit file for six years.

For example: Someone with large debts they can never repay applies for bankruptcy online. Most of the debts are cleared a year later.

Article inside Foliopeak: Debt Help: Free Advice and the Formal Options

Bare trust

A simple trust where the money belongs outright to the person it is for.

In plain English:Money is held for someone, often a child, by a trustee, but it belongs to that person outright. They can have it when they turn eighteen.

MoreLess about Bare trust

A trust where the person it's for has the right to all the money and any income. A trustee looks after it until then.

The beneficiary can take it all at 18 (16 in Scotland), and it's taxed as theirs.

For example: A grandmother puts £10,000 in a bare trust for her granddaughter, who can take it all on her 18th birthday.

Article inside Foliopeak: Children's Money Beyond the Junior ISA

Basic bank accountUK

A simple, fee-free current account for people who can't get a standard one.

In plain English:A simple current account with no overdraft and no monthly fee, for people a bank turns down for a normal account.

MoreLess about Basic bank account

A current account with no overdraft and no monthly fee, for people who can't get a standard one, for example because of a poor credit history.

The UK's largest banks must offer one. It still comes with a debit card and Direct Debits.

For example: Someone turned down for a normal account after a bankruptcy opens a basic bank account to get their wages paid in.

Basic State PensionUK

The older State Pension for people who retired before the new one began.

In plain English:The State Pension for people who reached State Pension age before the new one began. Some also get extra on top.

MoreLess about Basic State Pension

The State Pension for people who reached State Pension age before 6 April 2016: men born before 6 April 1951 and women born before 6 April 1953.

The new State Pension replaced it for everyone after them. Some people on it also get the additional State Pension.

For example: A woman born in 1950 gets the basic State Pension, plus some extra from what she built up at work.

Article inside Foliopeak: The State Pension, and Your National Insurance Record

Basis point

A hundredth of a percentage point, used for small changes in rates.

In plain English:One basis point is one hundredth of one percent. So a rate going from one percent to one and a quarter percent is a rise of twenty-five basis points.

MoreLess about Basis point

A hundredth of a percentage point, used for small moves in interest rates and bond yields.

A cut of 25 basis points is a quarter of a percentage point.

For example: A rate rising from 4% to 4.25% has gone up 25 basis points.

Bear and bull markets

A long fall in a market is a bear market, and a long rise is a bull market.

In plain English:When prices keep falling for months, it's a bear market. When they keep rising, it's a bull market.

MoreLess about Bear and bull markets

A bear market is a long fall in a market, often taken as a drop of 20% or more from its peak. A bull market is a long rise.

Bull markets have tended to last much longer than bear markets, but nobody can reliably say when one will end.

For example: Shares fell more than 20% in early 2020, a bear market, then rose strongly for the next two years, a bull market.

Bed and breakfastingUK

Selling shares and buying them straight back, which no longer helps with tax.

In plain English:Selling shares to use up your tax-free gain, then buying them back the next day. The rules stopped this working, so you now need to wait thirty days.

MoreLess about Bed and breakfasting

Selling shares and buying them back the next day to use up the year's tax-free amount for gains, or to lock in a loss.

The thirty-day rule stopped it working in 1998. Buying back inside an ISA or pension, or by a husband, wife or civil partner, isn't caught.

For example: Someone sells shares to use their tax-free gain and buys them straight back. Because it's within 30 days, the sale doesn't count for tax.

Article inside Foliopeak: How Section 104 Pooling Actually WorksGame: 30-Day Rule

Bed and ISAUK

Selling investments and buying them back inside an ISA, so they grow tax-free.

In plain English:You sell investments you hold outside an ISA, then buy them straight back inside one. From then on, any growth is tax-free.

MoreLess about Bed and ISA

You sell investments held outside an ISA and buy them back inside one, so future income and gains are tax-free.

The sale itself can make a capital gain, and what goes in counts towards your ISA allowance. Many platforms do it in one step.

For example: Someone with shares in an ordinary account sells £10,000 worth and buys them back in their ISA, so they won't be taxed again.

Article inside Foliopeak: Bed and ISA - Moving Investments Into an ISA

Bed and spouseUK

Selling shares and having your husband, wife or civil partner buy the same ones.

In plain English:You sell shares to use your tax-free gain, and your husband, wife or civil partner buys the same shares, so the family still owns them.

MoreLess about Bed and spouse

If you sell shares and buy the same ones back within 30 days, your sale is matched to the new shares, so it doesn't use your tax-free amount for gains or give you a loss to use.

That rule only covers the same person. If your husband, wife or civil partner buys them instead, your sale counts straight away and the family still owns them.

For example: Sell £10,000 of a fund with a £3,000 gain, and your partner buys the same fund the next day. Your gain uses your £3,000 tax-free amount for this year.

Figures checked 8 November 2026. Source: gov.uk (opens in a new tab)

Article inside Foliopeak: Rebalancing Without a Capital Gains Tax Bill

Benchmark

The yardstick an investment's results are measured against.

In plain English:Something to compare an investment with, like a stock market index. It tells you if your fund did better or worse than the market.

MoreLess about Benchmark

The yardstick an investment's results are measured against, usually an index, like the FTSE All-Share for a fund of UK shares.

It tells you whether a fund manager is earning their fee.

For example: A UK shares fund measured against the FTSE All-Share looks weak with a 6% year if the index rose 9%.

Article inside Foliopeak: Investment Returns: Total, Time-Weighted, Money-Weighted and Real

Beneficial loanUK

A cheap or interest-free loan from your employer, which can be taxed.

In plain English:If your employer lends you money at little or no interest, the interest you save can count as a perk and be taxed.

MoreLess about Beneficial loan

A cheap or interest-free loan from your employer, like a season ticket loan.

If such loans add up to more than £10,000 at any point in the tax year, the interest you save is taxed as a perk.

For example: An employer lends someone money for an annual train ticket with no interest. As long as the total stays under the limit, there's no tax.

Figures checked 11 November 2026. Source: gov.uk (opens in a new tab)

Beneficiary

Someone who receives money from a will, trust, pension or insurance policy.

In plain English:The person who gets money or things from a will, trust, pension or life insurance.

MoreLess about Beneficiary

A person who receives money or property from a will, a trust, a pension or a life insurance policy.

You can name beneficiaries on pensions and life insurance separately from your will, so keep both up to date.

For example: A woman names her two children as beneficiaries of her pension, so they'll get it if she dies.

Benefit capUK

A limit on the total benefits most working-age households can get.

In plain English:There's a limit on how much benefit money most working-age households can get in total. Some people, like many who work, are not capped.

MoreLess about Benefit cap

A limit on the total most working-age people can get from benefits. It's higher in Greater London.

It doesn't apply to people on Universal Credit earning over a set amount, or getting certain disability or carer's benefits.

For example: A large family not in work finds their Universal Credit cut because their total benefits are over the cap.

Benefit in kindUK

A perk from your employer, such as a company car, that is usually taxed.

In plain English:Something your employer gives you that isn't pay, like a company car or private health cover. You usually pay tax on its value.

MoreLess about Benefit in kind

Something of value your employer gives you besides pay, like a company car or private medical insurance.

Most are taxed as income, and the employer pays National Insurance on them too.

For example: Someone gets private health cover through work. Its value is added to their taxable pay through their tax code.

Benefit sanctionsUK

A cut to a benefit for not doing what you agreed to, such as missing an appointment.

In plain English:If you don't do what you agreed with the Jobcentre, like going to an appointment, your benefit can be cut for a while.

MoreLess about Benefit sanctions

A cut to Universal Credit or a jobseeker's benefit for not doing what you agreed in your claimant commitment, like missing an appointment, without a good reason.

You can ask for a mandatory reconsideration, and you may get hardship payments, which are paid back later.

For example: Someone misses a Jobcentre appointment because they weren't told about it. They ask for the decision to be looked at again.

See also: Mandatory reconsideration

Bereavement Support PaymentUK

Money to help someone whose husband, wife or partner has died.

In plain English:If your husband, wife or civil partner dies, you may get a lump sum and some monthly payments to help with the costs.

MoreLess about Bereavement Support Payment

A payment for someone under State Pension age whose husband, wife or civil partner has died, or a partner they lived with if they have children.

It's a first payment of £3,500 or £2,500, then up to 18 monthly payments. It doesn't affect other benefits.

For example: A father whose wife dies, leaving young children, gets the higher first payment and then monthly payments.

Figures checked 3 October 2026. Source: gov.uk (opens in a new tab)

Article inside Foliopeak: When Someone Close Dies: The Money in the First Months

Best execution

A broker's duty to get you a fair result when it carries out your trade.

In plain English:When you buy or sell, your platform has to try to get you a good deal, not just the easiest one for itself.

MoreLess about Best execution

Platforms must publish a policy saying how they choose where your orders go.

It doesn't promise the best price every time, but the platform must check it gets good results overall.

For example: A platform can trade a share through several market makers. Under best execution, it checks which gives the better price and cost before placing the order.

Article inside Foliopeak: How Buying and Selling Shares Works

Beta

How much an investment tends to move when the market moves.

In plain English:A beta of one means an investment moves in step with the market. Higher means it swings more. Lower means it swings less.

MoreLess about Beta

How much an investment tends to move with the market. A beta of 1 moves in line with it.

Above 1 means it swings more than the market; below 1 means it swings less.

For example: A share with a beta of 1.5 tends to rise 15% when the market rises 10%, and fall 15% when it falls 10%.

Bid-offer spread

The gap between the buying and selling price of an investment.

In plain English:You buy an investment at a slightly higher price than you could sell it for. That gap is a hidden cost each time you trade.

MoreLess about Bid-offer spread

You buy an investment at a slightly higher price (the offer) than you could sell it for (the bid). The gap is the spread.

It's a cost on top of any dealing charge, and it's wider for small or rarely traded shares.

For example: If you can buy at 101p and sell at 99p, the spread is 2p.

Bitcoin

The first and largest cryptocurrency, with a fixed limit on how many coins can ever exist.

In plain English:The first cryptocurrency. It's digital money with no bank behind it, and only a set number of coins will ever be made. Its price swings a lot.

MoreLess about Bitcoin

The first and largest cryptocurrency, launched in 2009 by someone using the name Satoshi Nakamoto. No more than 21 million bitcoins can ever exist.

Its price can rise or fall by huge amounts in a short time, and it has no FSCS protection.

For example: Bitcoin has more than halved in value several times in its history, before rising again.

Article inside Foliopeak: CryptocurrencyGame: Halving Clock

Black swan

A rare, unexpected event that has a huge effect on markets or the economy.

In plain English:Something almost nobody saw coming that shakes the world, like the pandemic. These events remind us to be ready for surprises.

MoreLess about Black swan

A rare, unexpected event with a huge effect, like the 2008 financial crisis or the COVID-19 pandemic.

Because nobody sees them coming, they're a good reason to spread your money around and keep an emergency fund.

For example: Few people saw the pandemic coming, and in weeks shares fell sharply and many people lost income.

Article inside Foliopeak: Diversification and Rebalancing, Briefly

Blind Person's AllowanceUK

Extra tax-free income for people who are registered blind.

In plain English:If you're registered blind, or can't do work where eyesight is needed, you get extra income you don't pay tax on.

MoreLess about Blind Person's Allowance

An extra tax-free allowance on top of the Personal Allowance for people who are registered blind or severely sight impaired.

Any you don't use can pass to your husband, wife or civil partner.

For example: A registered blind woman pays no tax on a little more of her income than most people, because of this allowance.

Blockchain

A shared digital record of transactions that is very hard to change.

In plain English:A record of payments copied across thousands of computers. Because everyone has a copy, it's very hard for one person to change it.

MoreLess about Blockchain

A shared digital record of transactions, copied across many computers so no single body controls it.

Past entries are very hard to change, which is why cryptocurrencies run on one.

For example: Every Bitcoin payment since 2009 is written on Bitcoin's blockchain, and anyone can look it up.

Article inside Foliopeak: Cryptocurrency

Blue chip

A big, well-established company with a long track record.

In plain English:A large, well-known company that has been around a long time and is seen as fairly reliable, like big banks or supermarkets.

MoreLess about Blue chip

A large, long-established company with a solid record, like many in the FTSE 100.

Blue chips are seen as more reliable, but their shares can still fall, sometimes sharply.

For example: Big banks, oil companies and supermarkets are often called blue chips.

Boiler room scam

Cold calls pushing worthless or fake investments with pressure to buy fast.

In plain English:Pushy callers ring out of the blue, offering shares or investments that are fake or worthless and pressing you to buy fast. Hang up.

MoreLess about Boiler room scam

Callers ring out of the blue offering shares or investments that are worthless, overpriced or don't even exist. They often say the offer ends today, to stop you thinking it through.

Check any firm on the FCA register and its warning list, and hang up on cold calls about investments. Real firms don't sell this way.

For example: A caller offers shares in a mining company "about to be bought out" and says you must decide in an hour. It's a boiler room scam.

See also: Investment scam

Boiler Upgrade SchemeApplies in England, WalesEnglandWales

A government grant towards swapping your boiler for a heat pump.

In plain English:The government gives money off the cost of replacing a gas or oil boiler with a heat pump or similar low-carbon heating.

MoreLess about Boiler Upgrade Scheme

A government grant in England and Wales towards swapping a gas, oil or electric heating system for a heat pump or biomass boiler.

You don't apply yourself: the installer applies and takes the grant off your bill.

For example: A family replacing an old gas boiler with a heat pump pays the installer the price minus the grant.

Bond

A loan to a government or company that pays you interest.

In plain English:You lend money to a government or company. It pays you interest each year and gives you your money back on a set date.

MoreLess about Bond

You lend money to a government or company. It pays you interest, called the coupon, and gives back the amount borrowed on a set date.

Once a bond is traded, its price moves with interest rates: when rates rise, existing bonds with lower interest are worth less.

For example: Lend £1,000 to the government for ten years at 4% and you get £40 a year, then your £1,000 back at the end.

Article inside Foliopeak: Bonds

Bond funds

Funds that hold many bonds, with no set date when you get your money back.

In plain English:A fund that holds lots of different bonds. Unlike one bond, it has no end date, so its value can go up and down.

MoreLess about Bond funds

A fund that holds many bonds, like gilts or company bonds, so you're spread across lots of borrowers.

Unlike a single bond, a bond fund never matures, so there's no date when you get your money back. Its price falls when interest rates rise.

For example: When interest rates rose sharply in 2022, many bond funds lost a big chunk of their value.

See also: Bond

Bond yield

The yearly return a bond pays compared with its price today.

In plain English:The yearly return you'd get from a bond if you bought it today. When bond prices fall, yields go up, and the other way round.

MoreLess about Bond yield

The yearly return a bond pays, as a share of what it costs today.

Prices and yields move opposite ways. When bond prices fall, yields rise, and borrowing gets more expensive for governments and companies.

For example: If a bond paying £5 a year falls in price from £100 to £90, its yield rises from 5% to about 5.6%.

Bonus issue

Free new shares given to every shareholder in proportion to what they hold.

In plain English:A company gives free extra shares to all its shareholders, based on how many they already have. Each share is then worth less.

MoreLess about Bonus issue

A company gives every shareholder free new shares in proportion to what they already own, like one new share for every ten.

No money changes hands, so each share is worth less and your holding is worth the same. For Capital Gains Tax, what you paid is spread across old and new shares.

For example: Someone with 100 shares worth £5 each gets 10 more free. They now have 110 shares worth about £4.55 each.

Article inside Foliopeak: Types of Shares: Ordinary, Preference, and A, B and C Shares

Bonus rate (savings)

An extra savings rate that only lasts for a set time.

In plain English:An extra bit of interest on a savings account that only lasts a while. When it ends, the rate drops, so it's worth checking.

MoreLess about Bonus rate (savings)

An extra rate a savings account pays for a set time, often the first year.

When it ends the rate drops, so it's worth noting the date and moving your money if a better rate is on offer.

For example: An account pays a bonus for twelve months, then drops to a much lower rate. The saver sets a reminder to move the money.

Bonus sacrificeUK

Having a bonus paid into your pension instead of as pay, to save tax.

In plain English:You give up some or all of a bonus, and your employer pays it into your pension. You save tax and National Insurance on it.

MoreLess about Bonus sacrifice

You give up some or all of a bonus and your employer pays it into your pension instead. You pay no income tax or National Insurance on the part given up, and some employers add their own National Insurance saving too.

From 6 April 2029, National Insurance is due on pension salary sacrifice over £2,000 a year, and bonus sacrifice counts towards that.

For example: A higher-rate taxpayer puts a £5,000 bonus into their pension instead of taking it as pay, and the whole £5,000 goes in.

Article inside Foliopeak: Salary Sacrifice Into a Pension

Book cost

What you paid for an investment, used to work out your gain or loss.

In plain English:The total you paid for an investment, including costs. You compare what it's worth now with this to see your gain or loss.

MoreLess about Book cost

What you paid for an investment, including dealing costs.

It's used to work out your gain or loss when you sell, so it's worth keeping records of.

For example: Someone buys shares for £1,000 plus a £10 dealing charge. Their book cost is £1,010.

Article inside Foliopeak: How Section 104 Pooling Actually Works

Book value

What a company's accounts say it's worth, owned minus owed.

In plain English:What a company owns minus what it owes, as its accounts show. Its share price can be much higher or lower than this.

MoreLess about Book value

What a company's accounts say it's worth: what it owns minus what it owes.

The share price can be well above it, for a company expected to grow, or below it, for one in trouble.

For example: A company owns £100 million of assets and owes £40 million, so its book value is £60 million, even if the stock market values it at £200 million.

See also: Price to book ratio (P/B)

Bookkeeping

Keeping a record of everything a business earns and spends.

In plain English:Writing down every sale and every cost in a business, and keeping the receipts. It makes doing your tax return much easier.

MoreLess about Bookkeeping

Keeping a record of everything a business earns and spends, with the receipts and invoices behind it.

HMRC can ask to see these records for years afterwards, and Making Tax Digital means keeping them in software.

For example: A self-employed hairdresser logs every payment and supply receipt in an app each week, so her tax return takes an hour.

See also: Making Tax Digital for Income Tax

Bounce Back LoanUK

A government-backed Covid loan for small businesses that many are still paying back.

In plain English:During Covid, small businesses could borrow from banks with the government promising to cover them if it wasn't paid back.

MoreLess about Bounce Back Loan

A government-backed loan for small businesses during Covid, made in 2020 and 2021 at a fixed 2.5% interest. Many are still being paid back.

Pay As You Grow lets a business stretch the term or pause payments. The loan is the company's debt, but closing a company that still owes one is looked at closely.

For example: A café that borrowed during lockdown uses Pay As You Grow to lower its monthly repayments.

BR, D0 and 0T tax codesUK

Tax codes that tax all of a job's pay at one rate, or with no tax-free amount.

In plain English:These codes tell your employer to tax all your pay from that job at one rate, with no tax-free amount. They're often used for a second job.

MoreLess about BR, D0 and 0T tax codes

BR taxes all the income from a job or pension at the basic rate, often for a second job. D0 taxes it all at the higher rate.

0T taxes it at the normal rates but with no Personal Allowance, often used when HMRC doesn't have your details yet.

For example: Someone with a main job and a weekend job has a BR code on the weekend job, because their tax-free amount is used by the main one.

Article inside Foliopeak: Your Tax Code and Your Payslip

Break-even point

The level of sales where a business covers its costs, with no profit or loss.

In plain English:How much a business has to sell to pay all its costs. Sell more than that and you make a profit; less and you make a loss.

MoreLess about Break-even point

The level of sales at which a business covers all its costs, making neither a profit nor a loss.

Every sale above it adds to profit, which is why knowing it helps with pricing.

For example: A food stall's costs are £300 a day and it makes £3 on each meal, so it breaks even after selling 100 meals.

Article inside Foliopeak: Being a Sole Trader, in Plain English

Breathing SpaceApplies in England, WalesEnglandWales

A break from debt collection while you get debt advice.

In plain English:If you get debt advice, you can ask for a sixty-day pause where lenders must stop chasing you and freeze most interest and charges.

MoreLess about Breathing Space

A scheme in England and Wales that pauses most action to collect debts, and most interest and charges on them, usually for 60 days.

You get it through a debt adviser, and it gives you time to work out a plan without lenders chasing you.

For example: Someone overwhelmed by debt calls a free debt charity, which sets up a breathing space while they sort out a plan.

Article inside Foliopeak: Debt Help: Free Advice and the Formal Options

Brent crude

The main world oil price, quoted on the news in dollars a barrel.

In plain English:The price of oil from the North Sea, used as the world's main oil price. It feeds into what we pay for petrol and energy.

MoreLess about Brent crude

The main world oil price, named after a North Sea oil field and quoted in US dollars a barrel.

It's the oil price you hear on the news, and it feeds through to petrol and energy prices.

For example: When Brent crude jumps because of trouble in the Middle East, petrol prices at UK pumps usually rise a few weeks later.

See also: Commodities

Bridge (crypto)

A service that moves crypto tokens from one blockchain to another.

In plain English:A service that lets you move crypto from one blockchain to another. Bridges have been hacked many times, so they carry extra risk.

MoreLess about Bridge (crypto)

A service that moves crypto from one blockchain to another, usually by locking it on the first and issuing wrapped tokens on the second.

Bridges hold a lot of crypto in one place, so hackers often target them, and some huge thefts have happened this way.

For example: Someone moves coins across a bridge to use a cheaper network. A month later the bridge is hacked and the locked coins are stolen.

See also: Wrapped token

Bridging loan

A short, expensive loan to cover the gap between buying and selling a home.

In plain English:A short-term loan to cover the gap when you buy a new home before your old one has sold. It costs a lot more than a mortgage.

MoreLess about Bridging loan

A short-term loan secured on property, often used to buy a new home before the old one sells.

It's quick to arrange but expensive, and you need a clear plan to repay it, usually from the sale.

For example: A couple find their dream home but haven't sold their flat yet, so they take a bridging loan for six months.

British Business BankUK

A government-owned bank that helps small businesses get loans through other lenders.

In plain English:A bank owned by the government that doesn't lend to you directly, but helps banks and other lenders offer money to small businesses.

MoreLess about British Business Bank

A government-owned bank that helps small businesses get finance. It mostly backs loans and funds run by other lenders rather than lending itself.

It runs Start Up Loans and the government's loan guarantee schemes.

For example: A small manufacturer gets a bank loan it might otherwise have been refused, because a British Business Bank scheme guarantees part of it.

See also: Start Up Loans

Bubble

When prices rise far above what something is worth, then crash.

In plain English:When excitement pushes prices way above what something is really worth. When people stop buying, prices can crash quickly.

MoreLess about Bubble

The price of something rises far above what it seems worth, driven by excitement and fear of missing out, then falls sharply.

Bubbles are easy to see afterwards and hard to spot at the time.

For example: In the late 1990s, internet shares soared on hype, then many lost almost all their value in the dot-com crash.

Budget

A plan for your money coming in and going out, or the government's yearly tax plan.

In plain English:Writing down what money comes in and what goes out, so you can plan. The Budget with a capital B is when the government sets taxes.

MoreLess about Budget

A plan for the money coming in and going out, so you know where it goes and can save.

With a capital B, the Budget is the Chancellor's yearly statement of tax and spending changes.

For example: Someone lists their pay, then their bills and spending, and finds £150 a month they can start saving.

Article inside Foliopeak: What Changed in the Budget

Budgeting AdvanceUK

An interest-free loan from Universal Credit for a one-off cost.

In plain English:If you get Universal Credit, you can borrow money for something urgent, like a cooker. It's paid back from your future payments with no interest.

MoreLess about Budgeting Advance

An interest-free loan from Universal Credit for one-off costs, like a cooker or the costs of starting a job.

It's paid back out of your later payments, so your monthly amount is lower for a while.

For example: Someone on Universal Credit whose fridge breaks gets a budgeting advance and pays it back over the next year.

See also: Universal Credit

Building society

A bank-like firm owned by its savers and borrowers.

In plain English:Like a bank, but owned by its customers rather than shareholders. Building societies mainly offer savings and mortgages.

MoreLess about Building society

A financial firm owned by its members, its savers and borrowers, rather than by shareholders.

It mainly offers savings and mortgages, and members can vote on how it's run. Savings are protected by the FSCS like a bank's.

For example: Nationwide is the UK's largest building society, owned by its customers.

Buildings and contents insurance

Insurance for your home's structure and for the things inside it.

In plain English:Buildings insurance pays to fix the house itself, like after a flood or fire. Contents insurance pays for your belongings inside.

MoreLess about Buildings and contents insurance

Buildings insurance covers the structure of your home, like the walls, roof and fitted kitchen. A mortgage lender usually requires it.

Contents insurance covers your belongings inside. Renters usually only need contents insurance, as the landlord insures the building.

For example: After a burst pipe, buildings insurance pays to fix the ceiling and contents insurance pays for the ruined sofa.

Business Asset Disposal Relief (BADR)UK

A lower rate of tax when you sell your business.

In plain English:When you sell all or part of your business, you can pay a lower rate of Capital Gains Tax on the profit, up to a lifetime limit.

MoreLess about Business Asset Disposal Relief (BADR)

A lower rate of Capital Gains Tax when you sell all or part of a business, or shares in your own trading company, on gains up to a lifetime limit.

It was called Entrepreneurs' Relief until April 2020. There are conditions, like how long you've owned and worked in the business.

For example: A founder who's run her company for ten years sells it and pays a lower rate of tax on the gain.

Business cycle

The way the economy grows and shrinks in waves over the years.

In plain English:The economy goes through good times, when it grows, and bad times, when it shrinks. Then it usually grows again.

MoreLess about Business cycle

The economy grows and shrinks in waves: a boom, a slowdown, sometimes a recession, then a recovery.

Jobs, share prices and house prices tend to rise and fall with it, and nobody can reliably time the turns.

For example: After the 2008 recession, the UK economy slowly recovered and unemployment fell over the following years.

Article inside Foliopeak: Why Good Plans Get Abandoned

Business ratesUK

A tax on shops, offices and other business property.

In plain English:A tax businesses pay on shops, offices, pubs and other buildings they use. Small businesses often get money off.

MoreLess about Business rates

A tax on business property like shops, offices and pubs, worked out from what it could be rented for.

Small businesses can get relief, sometimes paying nothing. Scotland, Wales and Northern Ireland have their own rules.

For example: A small corner shop with a low rental value may pay no business rates at all because of small business relief.

Business ReliefUK

A cut in Inheritance Tax on a business or business assets.

In plain English:When a business or shares in certain companies are passed on after death, there can be much less Inheritance Tax to pay on them.

MoreLess about Business Relief

It cuts Inheritance Tax on a business or business assets that qualify, so family firms don't have to be sold to pay the bill. Since 6 April 2026, property that qualifies for full relief gets it on the first £2,500,000, shared with agricultural relief.

Above that, the relief is 50%. Some AIM shares can qualify too.

For example: A father leaves his engineering firm to his daughter, and Business Relief means little or no Inheritance Tax is due on it.

Article inside Foliopeak: Business Relief and Farm Relief From April 2026

Buy and hold

Buying investments and keeping them for many years through the ups and downs.

In plain English:Buying investments and leaving them alone for many years, rather than buying and selling often. It keeps costs low and avoids panic selling.

MoreLess about Buy and hold

Buying investments and keeping them for many years through the ups and downs, rather than trading often.

It keeps dealing costs and tax down, and avoids the danger of selling in a panic.

For example: Someone buys a global index fund in their twenties and leaves it alone for decades, adding money each month.

See also: Market timing

Buy now, pay later

Splitting a purchase into instalments, often with no interest if you pay on time.

In plain English:You split what you buy into a few payments. It's often interest-free, but late payments can bring fees and affect your credit.

MoreLess about Buy now, pay later

You split what you buy into instalments, often with no interest if each is paid on time.

Most agreements made since 15 July 2026 are regulated by the FCA, so the lender must check you can afford them. Missed payments can bring fees and be reported to credit reference agencies.

For example: A £120 coat split into three monthly payments of £40, often with a fee if you miss one.

Article inside Foliopeak: Credit Cards and Borrowing: What It Really Costs

Buy-to-let

Buying a property to rent out.

In plain English:Buying a home to rent it out. You get rent, but you also pay tax, repairs and mortgage costs, and there's work involved.

MoreLess about Buy-to-let

Buying a property to rent out. Rental profit is taxed as income.

A landlord who owns it personally gets only a basic-rate tax reduction for mortgage interest (Section 24), and buying usually brings the additional property surcharge.

For example: Someone buys a flat to rent out. After the mortgage, repairs and tax, the rent leaves a small profit each month.

Article inside Foliopeak: Letting Out Property: Section 24 and What You Can Deduct