Money Terms in Plain English.

I

IBAN (International Bank Account Number)

A code that identifies a bank account for payments from abroad.

In plain English:A long code that identifies your bank account, used when someone sends you money from another country.

MoreLess about IBAN (International Bank Account Number)

IBAN stands for International Bank Account Number. You'll often also need the bank's SWIFT or BIC code.

Using the wrong IBAN can delay a payment or send it to the wrong place.

For example: Someone sends money to a friend in Spain using their IBAN, which starts with ES.

ICO (initial coin offering)

Selling a new crypto token to the public to raise money.

In plain English:When a new crypto project sells its tokens to the public to raise money. Many have been scams or lost almost all their value.

MoreLess about ICO (initial coin offering)

ICO stands for initial coin offering. They were most popular in 2017 and 2018.

Unlike shares, tokens usually give no ownership or rights in the project.

For example: A project raises millions in an ICO, promising a new app. It never launches, and the tokens become worthless.

See also: Rug pull

Identity fraud

When someone uses your personal details to borrow or buy things in your name.

In plain English:Someone uses your name and details to open accounts, borrow money or buy things. Checking your credit file helps you spot it.

MoreLess about Identity fraud

Fraudsters often use details from data leaks, post or social media. Shred post with personal details.

Cifas Protective Registration can add an extra check to applications in your name.

For example: Someone gets a letter about a loan they never took out. They contact the lender and report it, and the loan is removed from their file.

Article inside Foliopeak: Your Report Matters More Than Your Score

Ill-health retirement

Taking your pension early because illness stops you working.

In plain English:If you become too ill to work, you may be able to take your pension before the usual age, sometimes with extra added.

MoreLess about Ill-health retirement

Someone under 75 expected to live less than a year can usually take the whole pot tax-free.

In defined benefit schemes, it can mean an unreduced pension paid early. Rules differ by scheme.

Some schemes pay a higher pension when the illness is more severe.

For example: A teacher who can no longer work because of illness gets their pension early without a reduction, after a medical review.

IMF (International Monetary Fund)

An international organisation that lends to countries in money trouble.

In plain English:The International Monetary Fund. It lends money to countries in trouble and gives advice on running their economies.

MoreLess about IMF (International Monetary Fund)

The UK borrowed from it in 1976.

IMF stands for International Monetary Fund. It was set up in 1944, after the Second World War.

Its loans often come with conditions like cutting spending or raising taxes, which can be controversial.

For example: During the Greek debt crisis, the IMF lent money alongside European countries in return for spending cuts.

Impact investing

Investing to make a measurable good difference as well as a return.

In plain English:Investing in companies or projects that aim to do something good, like clean energy, while still trying to make money.

MoreLess about Impact investing

Impact is measured and reported, such as homes built or carbon cut.

Returns can be lower than the market, or similar. It's often done through specialist funds.

For example: A fund invests in companies building social housing and reports how many families it has housed.

See also: ESG

Impairment

Cutting the value of something in the accounts because it's now worth less.

In plain English:When something a company owns is worth less than its accounts say, the company has to lower its value, which cuts its profit.

MoreLess about Impairment

It's a sign that past spending, such as a takeover, didn't pay off.

Large impairments can make a profitable company show a loss.

For example: A company writes down the value of a business it bought for £1 billion by £400 million, after the business struggled.

See also: Goodwill

Income protection

Insurance that replaces part of your pay if illness or injury stops you working.

In plain English:Insurance that pays you a monthly income if you can't work because of illness or injury, until you can go back or the policy ends.

MoreLess about Income protection

It usually pays a share of your income, often around half to two-thirds. A longer waiting period lowers the cost.

Some employers offer it. It can pay out for many years, unlike some other cover.

For example: Someone breaks their back and can't work for a year. Their income protection pays a monthly amount after the first three months.

Article inside Foliopeak: Life Insurance and Income Protection: The Gap Most Families Have

Income statement

The US name for the profit and loss account.

In plain English:A report showing what a company earned, what it spent and the profit or loss left over. In the UK it's called the profit and loss account.

MoreLess about Income statement

It shows whether the company made a profit, after all costs and tax. It's one of the main parts of company accounts.

It doesn't show cash coming in or going out, which a cash flow statement does.

For example: A company's income statement shows £5 million of sales, £4 million of costs and £1 million of profit before tax.

See also: Profit and loss account

Income taxUK

Tax on your earnings, pension and other income above your tax-free amount.

In plain English:You pay this tax on your wages, pension, rent and other income once it goes over your tax-free amount. The more you earn, the higher the rate on the top slice.

MoreLess about Income tax

In England, Wales and Northern Ireland, income above the Personal Allowance is taxed at 20% up to £50,270, 40% up to £125,140 and 45% above. Dividends have their own rates.

Scotland has its own rates and bands. Most people pay through PAYE; others pay through Self Assessment.

For example: On a £60,000 salary you pay nothing on the first £12,570, 20% up to £50,270 and 40% on the rest: £11,432 in all.

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

Article inside Foliopeak: Income Tax & National Insurance, in One PlaceCalculator: Take-Home Pay

Incorporation

Turning a business into a limited company.

In plain English:Turning your business into a limited company, so the business is legally separate from you. It changes how you're taxed.

MoreLess about Incorporation

Directors have legal duties, and the company's accounts are public. Money taken out is usually taxed as salary or dividends.

Business debts usually stay with the company, which can protect your own money.

For example: A self-employed plumber turns their business into a limited company, paying themselves a salary and dividends.

Incorporation reliefUK

A tax relief that lets you move a business into a company without paying Capital Gains Tax straight away.

In plain English:If you move your whole business into a company in return for shares, you don't pay Capital Gains Tax then. It's put off until you sell the shares.

MoreLess about Incorporation relief

Since 6 April 2026 it has to be claimed on your Self Assessment return.

It applies automatically if all conditions are met, though now it must be claimed. Cash taken from the company instead of shares can be taxed.

Advice is often needed, especially for landlords.

For example: A landlord with a large portfolio moves it into a company in return for shares. The gain is carried into the shares until they're sold.

Article inside Foliopeak: Moving a Let Property Into a Company

Independent and restricted adviceUK

Whether a financial adviser can recommend from the whole market or only part of it.

In plain English:An independent adviser can recommend products from across the whole market. A restricted one can only pick from some products or firms.

MoreLess about Independent and restricted advice

A restricted adviser may still give good advice, but you should know what they can't recommend.

Advisers must also explain their charges up front.

For example: Someone uses a restricted adviser at their bank, who can only recommend the bank's own funds.

Index

A measure of how a group of investments is doing, such as the FTSE.

In plain English:A list of companies whose prices are combined into one number, like the FTSE hundred. It shows how that part of the market is doing.

MoreLess about Index

Indexes can be weighted by company size or price. Others track bonds, property or commodities.

Comparing a fund's return with an index shows how it did against the market.

For example: The S&P 500 index rises 2% in a day, showing large US companies mostly went up.

Article inside Foliopeak: Funds: ETFs, Index Trackers, and OEICs

Index fund (tracker)

A low-cost fund that copies a stock market index.

In plain English:A fund that simply buys all the companies in an index, like the FTSE. It doesn't try to beat the market, so it charges very little.

MoreLess about Index fund (tracker)

Some track a whole market, others a region or sector. Funds tracking the same index can differ slightly in returns and fees.

For example: A FTSE 100 index fund holds the hundred biggest UK companies in the same proportions as the index.

Article inside Foliopeak: Funds: ETFs, Index Trackers, and OEICs

Index-linked giltUK

A government loan whose payments rise with inflation.

In plain English:A loan to the UK government where the interest and the amount paid back go up with inflation, so rising prices don't eat into it.

MoreLess about Index-linked gilt

They protect against inflation, but their price still moves with interest rates. They can fall in value if rates rise.

Pension funds hold many of them.

For example: An index-linked gilt pays a small coupon that rises each year with inflation, and its final repayment also rises.

Article inside Foliopeak: Gilts, and the Low-Coupon Quirk

Index-linked savings certificatesUK

Tax-free NS&I savings that grow with inflation, only open to people who already hold them.

In plain English:NS&I savings that grow in line with inflation and are tax-free. New ones aren't sold, but people who have them can renew.

MoreLess about Index-linked savings certificates

They haven't been on sale to new savers since 2011.

When they end, you can renew for a new term or take the money. If you don't act, NS&I usually renews them.

They're among the few savings that fully keep up with inflation.

For example: Someone renews their index-linked certificates for another five years, keeping their savings growing with inflation, tax-free.

Article inside Foliopeak: Inflation - the Quiet One

Inflation

Prices rising over time, so money buys less.

In plain English:When prices go up over time, the same money buys less. If inflation is high, your savings need to grow faster just to keep up.

MoreLess about Inflation

In the UK it's usually measured by CPI. The Bank of England targets 2%.

For example: If prices rise 3% a year, something costing £100 today costs about £134 in ten years.

Article inside Foliopeak: Inflation - the Quiet One

Inflation risk

The chance that rising prices eat away at what your money can buy.

In plain English:If prices rise faster than your money grows, your money buys less each year, even if the number in your account goes up.

MoreLess about Inflation risk

Investments like shares and property have tended to beat inflation over the long run, but not every year.

Index-linked gilts and savings can protect against it.

For example: Someone keeps £10,000 in an account paying 1% while prices rise 5%. After a year, it buys about 4% less.

Article inside Foliopeak: Inflation - the Quiet One

Inheritance Act claimApplies in England, WalesEnglandWales

A court claim by someone left out of a will who expected to be provided for.

In plain English:If someone who depended on the person who died, like a partner or child, was left out of the will, they can ask a court for a fair share.

MoreLess about Inheritance Act claim

Courts look at things like need, the size of the estate and the relationship. Cases can be costly.

Leaving a letter explaining your choices can help if your will is challenged.

For example: An unmarried partner left nothing in a will makes a claim and the court awards them part of the estate.

Inheritance TaxUK

Tax on what you leave when you die, above the tax-free limits.

In plain English:When someone dies, tax may be due on what they leave above a tax-free amount. Anything left to a husband, wife or civil partner is usually free of it.

MoreLess about Inheritance Tax

The rate is 40% on the part above the tax-free thresholds. What passes to a husband, wife or civil partner is usually free of it, and gifts made more than 7 years before death usually fall outside it.

Executors usually pay it before probate. Gifts to charity can lower the rate on the rest.

For example: An estate worth £425,000 with no other allowances pays 40% on the £100,000 above £325,000, which is £40,000.

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

Article inside Foliopeak: Inheritance Tax Basics

Innovative Finance ISAUK

An ISA for peer-to-peer lending, with no protection if borrowers don't pay.

In plain English:An ISA where your money is lent to people or businesses through peer-to-peer lending. The interest is tax-free, but you could lose your money.

MoreLess about Innovative Finance ISA

It counts towards your yearly ISA allowance. Few providers offer it now.

Loans can be hard to sell if you need money back early.

For example: Someone puts money into peer-to-peer loans through an innovative finance ISA. The interest is tax-free, but some loans aren't repaid.

Article inside Foliopeak: Peer-to-Peer Lending and the Innovative Finance ISA

Insider dealing (insider trading)

Trading shares on secret company information, which is a crime.

In plain English:Buying or selling shares because you know secret news about a company before everyone else. It's a crime.

MoreLess about Insider dealing (insider trading)

Directors and staff often have set times when they can't trade their company's shares. Unusual trades before news are checked by the FCA.

Penalties include prison and fines.

For example: An employee buys shares the day before a takeover is announced, using what they heard at work. It's insider dealing.

See also: FCA (Financial Conduct Authority)

Insurance Premium Tax (IPT)UK

A tax built into the price of most general insurance.

In plain English:A tax added to the price of most insurance, like car and home insurance. It's already included in what you pay.

MoreLess about Insurance Premium Tax (IPT)

It's paid by insurers but built into the price. There's a higher rate on some products, like travel insurance.

It's not shown separately on most quotes.

For example: Someone pays £500 for car insurance, and part of that is insurance premium tax.

Interbank lending

Banks lending money to each other, often for just a night.

In plain English:Banks borrow from each other all the time to balance their books each day. If they stop trusting each other, the whole system can seize up.

MoreLess about Interbank lending

The interest rate on these loans shows how worried banks are about each other. In the UK the main measure is now SONIA, run by the Bank of England.

For example: In 2008, banks became scared of lending to each other even overnight, so central banks had to lend to them directly.

Article inside Foliopeak: Systemic Risk

Interest

The price of money: what borrowers pay and savers earn.

In plain English:If you borrow, interest is what you pay for using the money. If you save, it's what the bank pays you for keeping it.

MoreLess about Interest

Simple interest is worked out on the original amount only; compound interest adds interest on interest.

For borrowing, the APR shows the total yearly cost including fees.

For example: Someone saves £1,000 at 4% a year. After one year, they earn £40 of interest.

Interest cover

How many times a company's profit covers the interest on its debts.

In plain English:A company's profit divided by the interest it pays on its debts. The higher it is, the easier it can afford its borrowing.

MoreLess about Interest cover

Lenders often want it above a certain level. A figure below about two can be a warning sign.

It's worked out by dividing operating profit by interest costs.

For example: A company makes £10 million in operating profit and pays £2 million in interest. Its interest cover is five times.

See also: Gearing

Interest rate risk

The chance that a change in interest rates makes an investment lose value.

In plain English:When interest rates rise, bonds you already hold usually fall in value, because new bonds pay more.

MoreLess about Interest rate risk

Bond funds with long durations have the most of it. Savers face it too, if they fix and rates rise.

Holding a bond to the end avoids price losses, if the borrower pays.

For example: Someone buys a long gilt fund in 2021. When rates rise in 2022, it falls in value by a large amount.

Article inside Foliopeak: Bonds

Interest-free credit

An offer from a shop to spread a cost over months with no interest.

In plain English:A shop lets you pay for something over a set number of months with no interest. If you miss payments or go past the end date, interest can kick in.

MoreLess about Interest-free credit

Some deals are "buy now pay later" without a full credit check, but they still affect your credit file.

Paying by Direct Debit helps avoid missing payments.

For example: Someone buys a £1,200 sofa on interest-free credit over 12 months, paying £100 a month with no interest.

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

Interest-free period

The time a credit card gives you to pay for a purchase before any interest is charged.

In plain English:Pay off your credit card bill in full by the due date and you won't be charged interest on what you bought that month.

MoreLess about Interest-free period

Balance transfers and purchases may have different rules. Paying only part of the bill can mean interest on the whole amount.

It starts when you buy something and ends on the payment due date.

For example: Someone buys a laptop at the start of their card statement period and pays it off in full by the due date about seven weeks later, with no interest.

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

Interest-only and repayment mortgages

Mortgages that either pay off the loan as you go, or only cover the interest.

In plain English:With a repayment mortgage, each payment clears some of the loan, so it's paid off by the end. With interest-only, you still owe the whole loan at the end.

MoreLess about Interest-only and repayment mortgages

Interest-only mortgages need a plan to repay the loan, such as selling the home or investments. Lenders check that plan.

For example: On £200,000 at 5%, interest-only costs about £833 a month, but you still owe the whole £200,000 at the end.

Article inside Foliopeak: Buying a Home: From Offer to Keys

Interim and final dividends

Dividends paid during the year, and the one paid after the year's results.

In plain English:Companies often pay a dividend partway through the year, called interim, and another once the full year's results are out, called final.

MoreLess about Interim and final dividends

Some companies pay quarterly instead. Each payment has its own ex-dividend date.

Interim dividends are decided by the board alone.

For example: A company pays an interim dividend of 10p in October and a final dividend of 20p in May.

See also: AGM (annual general meeting)

Intestacy

Dying without a valid will, so the law decides who inherits.

In plain English:If someone dies without a valid will, the law decides who gets what. Unmarried partners can get nothing.

MoreLess about Intestacy

In England and Wales a husband, wife or civil partner gets the first £322,000 and shares the rest with any children.

Scotland and Northern Ireland have their own rules. Unmarried partners can make a claim to the court.

Making a will is the only sure way to choose who gets what.

For example: A man dies without a will, leaving a partner he never married. She gets nothing under intestacy and has to go to court.

Source: gov.uk (opens in a new tab)

Article inside Foliopeak: Wills and Lasting Powers of Attorney: Who Inherits, and Who Acts for You

Investment bank

A bank that helps companies raise money, advises on takeovers and trades in markets.

In plain English:A bank that helps big companies raise money, buy other companies and trade in markets, rather than looking after people's savings.

MoreLess about Investment bank

They earn fees from deals and trading. Many big banks split their everyday and investment banking after rules to protect savers.

UK rules called "ring-fencing" keep everyday banking apart from riskier investment banking in large banks.

For example: An investment bank helps a company sell new shares on the stock market for the first time.

Investment bond (insurance bond)UK

A lump sum invested through a life insurance policy, with its own tax rules.

In plain English:A lump sum you invest through an insurance company. It has its own tax rules, and you can usually take out a small amount each year without paying tax right away.

MoreLess about Investment bond (insurance bond)

The 5% withdrawals are a return of your own money, not income. Top slicing relief can lower tax when it's cashed in.

They're often used for Inheritance Tax planning with trusts.

For example: Someone puts £100,000 into an investment bond and takes £5,000 a year for 20 years without paying tax at the time.

Investment grade and high-yield bonds

Safer bonds, and riskier ones that pay more interest, sorted by credit rating.

In plain English:Investment grade bonds are from borrowers likely to pay back. High yield bonds are riskier, so they pay more interest to tempt investors.

MoreLess about Investment grade and high-yield bonds

The line is at BBB- with S&P and Fitch, or Baa3 with Moody's. Bonds can be moved from one group to the other.

High-yield bonds tend to move more like shares.

For example: A struggling retailer's bonds pay 9% a year as high-yield bonds, while a large utility's investment grade bonds pay 5%.

See also: Credit rating

Investment platform

A website or app for buying and holding investments.

In plain English:A website or app where you can buy, sell and hold funds, shares and ISAs in one place. Each one charges different fees.

MoreLess about Investment platform

Fees are either a percentage of what you hold or a fixed monthly amount. Which is cheaper depends on how much you have.

Your investments are held by a custodian, separate from the platform's own money. Moving to another platform is usually free.

For example: Someone with £50,000 compares platforms and switches to one with a flat fee, which costs less than a percentage of their pot.

Article inside Foliopeak: Fund Charges - OCF, Platform Fees and the Rest

Investment scam

A fake offer of high or guaranteed returns designed to take your money.

In plain English:Someone offers you a too-good-to-be-true return, often with pressure to act fast, then disappears with your money. Check the FCA register first.

MoreLess about Investment scam

Warning signs include pressure to act fast, returns that sound too good, and being asked to keep it secret. Scammers often copy the names of real firms.

If you've paid money, tell your bank straight away and report it to Action Fraud or Report Fraud. Watch out for "recovery" firms that offer to get it back for a fee.

For example: An advert shows a famous TV presenter backing a crypto scheme. It's fake, and people who sign up lose their money.

Investment trustUK

A company on the stock market whose business is investing in other companies.

In plain English:A company listed on the stock market whose job is to invest in other companies. You buy its shares, and their price can be above or below what it holds.

MoreLess about Investment trust

It has a board of directors that answers to its shareholders. It can borrow to invest, called gearing, and keep back some income for leaner years.

Because it doesn't have to sell investments when people want their money back, it suits hard-to-sell assets.

For example: An investment trust's holdings are worth £1 a share, but its shares trade at 90p. That's a 10% discount.

Article inside Foliopeak: Funds: ETFs, Index Trackers, and OEICs

Investors' ReliefUK

A lower tax rate on gains from shares in some small, unlisted companies.

In plain English:If you invest in new shares of some small companies not on the main market and hold them for years, you pay a lower rate of tax when you sell.

MoreLess about Investors' Relief

It's meant to encourage outside investors to back small private companies. The shares must be newly issued, not bought from someone else.

Business Asset Disposal Relief is a different relief for people who do work in the business.

For example: Someone buys new shares in a friend's unlisted company, holds them for five years and sells at a gain, paying the lower rate of Capital Gains Tax.

Invoice finance

A business getting cash early by borrowing against invoices customers haven't paid yet.

In plain English:A business gets most of the money for an unpaid invoice from a lender straight away, rather than waiting for the customer to pay. The lender takes a fee.

MoreLess about Invoice finance

With factoring, the lender usually chases the customers itself. With invoice discounting, the business still chases them, and customers may not know.

It can help a growing business that waits a long time to be paid.

For example: A business has £50,000 of unpaid invoices due in 60 days. A lender pays it £40,000 now and the rest, minus fees, when customers pay.

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

IPO (initial public offering)

When a company first sells its shares to the public.

In plain English:When a company first sells its shares on the stock market so anyone can buy them. It's also called floating or going public.

MoreLess about IPO (initial public offering)

IPO stands for initial public offering. Companies do it to raise money or let early owners sell.

Prices can swing a lot in the first days of trading. Some IPOs do well, and many fall below their first price.

For example: A company sells shares at £3 in its IPO. On the first day of trading they rise to £3.50, then fall below £3 within a year.

IR35UK

Rules that decide whether a contractor should be taxed like an employee.

In plain English:If you work through your own company but act like an employee, these rules can mean you pay tax as if you were one.

MoreLess about IR35

For medium and large clients, the client decides whether a contract is inside or outside. For small clients, the contractor decides.

Things that point to inside include being controlled by the client, having to do the work yourself, and being treated like staff.

For example: A contractor working full-time for one large client, with set hours and a manager, is placed inside IR35.

Article inside Foliopeak: IR35: Inside or Outside, and Why It Changes EverythingCalculator: IR35: Inside vs Outside

IRA and 401(k) (US pensions)

The main US retirement accounts, one through work and one personal.

In plain English:American retirement savings accounts. A 401(k) is through your job, and an IRA is one you open yourself. They're a bit like UK pensions.

MoreLess about IRA and 401(k) (US pensions)

The UK and US tax treaty helps, but some US rules clash with UK tax. Advice from someone who knows both systems can help.

Moving them into a UK pension is often not possible or wise.

For example: Someone who worked in the US for ten years moves to London and keeps their 401(k) in the US, getting advice on how it's taxed here.

ISA (Individual Savings Account)UK

An account where your savings and investments grow free of UK tax.

In plain English:A tax-free wrapper for your savings or investments. You pay no tax on the interest, dividends or growth, up to a yearly limit.

MoreLess about ISA (Individual Savings Account)

You can pay in up to £20,000 a tax year across all your adult ISAs, and unused room doesn't carry forward.

Within the limit, you can split it however you like, and open more than one of each kind in a year. Transfers between providers don't use new allowance.

For example: Put £5,000 in a Stocks and Shares ISA and if it grows to £7,000, the £2,000 gain is yours with no tax to pay.

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

Article inside Foliopeak: The ISA Allowance, Explained

ISA allowanceUK

The most you can pay into your ISAs each tax year.

In plain English:Each tax year, there's a limit on how much you can put into ISAs in total. Any you don't use is lost when the year ends.

MoreLess about ISA allowance

It resets on 6 April. A plan to lower how much can go into a Cash ISA was dropped in Budget 2026.

Money moved from one ISA to another doesn't count against it. A Junior ISA has its own separate limit.

Paying into an ISA earlier in the year gives the money longer to grow tax-free.

For example: Someone puts some of their allowance into a cash ISA and the rest into a stocks and shares ISA in the same tax year.

Article inside Foliopeak: The ISA Allowance, Explained

ISA transferUK

Moving an ISA to a new provider without losing its tax-free status.

In plain English:Moving your ISA to another bank or platform. Use the official transfer process, or you could lose the tax-free benefit.

MoreLess about ISA transfer

You fill in a form with the new provider, which does the rest. Cash ISA transfers should take no more than 15 working days.

You can usually move just part of an ISA from earlier years, but this year's money often has to move in full.

For example: Someone moves their cash ISA to a provider paying better interest by asking the new provider to transfer it.

Article inside Foliopeak: Transferring an ISA or Pension Without Breaking It

ISIN

A code that identifies one share, fund or bond anywhere in the world.

In plain English:A unique twelve-character code for a share, fund or bond, so you can be sure you're buying the right one.

MoreLess about ISIN

It's 12 characters long.

It starts with two letters for a country, such as GB for the UK. Searching by ISIN finds exactly the right fund on a platform.

Fund names can be very similar, so the ISIN helps avoid buying the wrong one.

For example: Someone types a fund's ISIN into their platform's search to find the exact version with the lowest charges.

Islamic (Sharia-compliant) finance

Banking and investing that follows Islamic law, without paying or earning interest.

In plain English:Banking and investing that follows Islamic law, where no interest is paid or charged. Banks share profits or charge rent instead.

MoreLess about Islamic (Sharia-compliant) finance

Banks use deals like ijara (leasing), murabaha (sale at a mark-up) and musharaka (shared ownership). Sukuk are Islamic bonds.

Funds can follow Sharia rules, screening out banks with interest and certain industries.

For example: A Muslim saver opens an account with an Islamic bank that pays an expected profit rate instead of interest.

IVA (individual voluntary arrangement)Applies in England, Wales, Northern IrelandEnglandWalesN. Ireland

A formal deal to repay part of your debts, with the rest written off.

In plain English:A legal agreement to pay back what you can afford to the people you owe over several years. Whatever's left is then written off.

MoreLess about IVA (individual voluntary arrangement)

IVA stands for individual voluntary arrangement. It usually lasts five or six years. People you owe vote on it, and it goes ahead if enough agree.

You may need to release equity in your home towards the end. There are fees, often taken from your payments.

For example: Someone with £30,000 of debts pays £300 a month for five years through an IVA, and the rest is written off.

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