Money Terms in Plain English.

O

OCF (ongoing charges figure)

A fund's yearly running cost.

In plain English:The yearly cost of running a fund, shown as a share of your money. A lower cost leaves more of the return for you.

MoreLess about OCF (ongoing charges figure)

OCF stands for ongoing charges figure. Lower charges leave more of the return for you.

For example: A fund with an OCF of 0.2% costs £20 a year on every £10,000 invested.

Article inside Foliopeak: Fund Charges - OCF, Platform Fees and the RestCalculator: Cost of Fees

OEIC (open-ended investment company)UK

A common type of UK fund.

In plain English:A common type of UK fund, short for open-ended investment company. You buy and sell at one price, and it grows or shrinks as money comes and goes.

MoreLess about OEIC (open-ended investment company)

OEIC stands for open-ended investment company. It's pronounced "oik".

You buy and sell at the same price.

For example: Someone puts money into an OEIC tracking global shares. Their order is filled at the next daily price.

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

Off-payroll workingUK

The contractor tax rules when working for a bigger business or public body.

In plain English:When a contractor works through their own company for a large business or public body, the client decides whether IR35 rules apply.

MoreLess about Off-payroll working

Clients must give a status determination statement explaining their decision. Contractors can challenge it.

For example: A contractor working for a large bank gets a statement saying the role is inside IR35, so tax is taken off before they're paid.

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

Office for Budget Responsibility (OBR)UK

The independent body that checks the government's sums.

In plain English:The Office for Budget Responsibility. It checks the government's figures independently and forecasts how the economy and public money will do.

MoreLess about Office for Budget Responsibility (OBR)

OBR stands for Office for Budget Responsibility. It was set up in 2010.

Its forecasts can affect what the government decides in the Budget.

For example: The OBR forecasts slower growth, so the Chancellor has less room to cut taxes in the Budget.

Offset mortgage

A mortgage where your savings reduce the interest you pay.

In plain English:Your savings are linked to your mortgage. You don't earn interest on them, but you only pay mortgage interest on what you owe minus your savings.

MoreLess about Offset mortgage

It suits people with large savings and higher tax rates, as savings interest would be taxed. The rate can be higher than other deals.

For example: With a £200,000 mortgage and £20,000 in the linked savings, you pay interest on only £180,000.

Offshore bond

An investment bond from an insurer outside the UK, where tax is put off until you cash in.

In plain English:An investment bond from an insurer outside the UK. You don't pay tax on growth until you cash it in, which can help with planning.

MoreLess about Offshore bond

It can suit people moving abroad. Advice from someone who knows both countries' tax is wise.

Some are sold with high hidden fees.

For example: A UK expat in Dubai buys an offshore bond. When they return to the UK and cash it in, the gain is taxed as income.

See also: Investment bond (insurance bond)

Ongoing advice fee

A yearly fee for a financial adviser to keep reviewing your money.

In plain English:A fee you pay a financial adviser each year to keep checking your money and plans. Make sure you get the reviews you pay for.

MoreLess about Ongoing advice fee

It's often 0.5% to 1% of what the adviser looks after.

It's usually taken from your investments, so you may not notice it. Over many years it can add up to a lot.

Some advisers charge a fixed yearly fee instead.

For example: Someone with £200,000 pays a 1% ongoing advice fee, which is £2,000 a year, and checks they get a yearly review.

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

OPEC

A group of oil-producing countries whose decisions move the oil price.

In plain English:A group of oil-producing countries that agree how much oil to pump. When they pump less, oil prices usually rise.

MoreLess about OPEC

It was set up in 1960. Cutting supply usually pushes oil prices up.

Oil prices affect the cost of transport, heating and many goods.

For example: OPEC+ agrees to pump less oil, and within weeks petrol prices in the UK rise.

See also: Brent crude

Open banking

A safe way to let apps see your bank account with your permission.

In plain English:A safe way to let approved apps see your bank account or make payments, but only if you agree. You can stop it any time.

MoreLess about Open banking

It's how budgeting apps can show all your accounts in one place. Firms using it must be authorised by the FCA.

You can withdraw permission at any time.

For example: Someone connects their bank accounts to a budgeting app using open banking, without giving the app their passwords.

Open finance

A plan to let apps see your savings, pensions and investments with your permission.

In plain English:A plan to let you share your savings, pensions and investments with approved apps, the way open banking works for bank accounts.

MoreLess about Open finance

The FCA set out its roadmap in April 2026.

It could make it easier to compare deals and see your whole financial picture.

Data protection and security rules would apply.

For example: In future, someone could let one app see their savings, pension and mortgage together, with their permission.

See also: Open banking

Opening and closing auctions

Short spells at the start and end of the trading day when orders are matched at one price.

In plain English:At the start and end of each day, the stock market collects everyone's orders and finds one price that suits the most buyers and sellers.

MoreLess about Opening and closing auctions

The London Stock Exchange runs an auction before the market opens and another just after it closes.

Index funds often trade in the closing auction, as it sets the price their index is worked out from.

For example: A big index fund needs to buy a share on the day it joins the FTSE 100, so it places its order in that day's closing auction.

Operating profit and net profit

A company's profit from its business, and what's left after interest and tax.

In plain English:Operating profit is what a company makes from its day-to-day business. Net profit is what's left after interest and tax too.

MoreLess about Operating profit and net profit

Operating profit shows how well the main business does. Net profit can be hit by big debts or one-off costs.

They're both in the income statement.

For example: A company makes £10 million operating profit, pays £2 million interest and £2 million tax, leaving £6 million net profit.

See also: EBITDA

Opportunity cost

What you give up by choosing one use of money over another.

In plain English:When you spend or invest money one way, you give up what else it could have done for you. That lost choice is the opportunity cost.

MoreLess about Opportunity cost

It applies to time as well as money. Every choice means giving up the next best option.

For example: Spending £5,000 on a car means not having that £5,000 growing in an ISA.

Options (calls and puts)

Contracts giving the right to buy or sell something at a set price.

In plain English:A contract that gives you the right, but not the duty, to buy or sell something at a set price by a set date. They're risky.

MoreLess about Options (calls and puts)

They can be used to protect against falls or to bet on moves. Buyers can lose all the premium.

Sellers can face much bigger losses.

For example: Someone pays £100 for an option to buy a share at £10. The share rises to £15, so the option is worth £500.

Order book

The live list of orders waiting to buy and sell a share.

In plain English:Buyers line up saying what they'll pay, and sellers line up saying what they want. A trade happens where the two meet.

MoreLess about Order book

A busy share has lots of orders close to the current price, so one trade barely moves it.

A quiet share has fewer orders, so a big buy or sell can use up the best prices and go through at worse ones.

For example: A share has buyers waiting at 99p and sellers at 101p. Someone selling straight away gets 99p, and someone buying straight away pays 101p.

Article inside Foliopeak: How Buying and Selling Shares Works

Ordinary power of attorney

A document letting someone handle your money for a while.

In plain English:A document that lets someone handle your money for a short time, like while you're abroad. It stops working if you lose mental capacity.

MoreLess about Ordinary power of attorney

It's often used for short-term help. It's simpler to make than a lasting power of attorney.

Banks may want to see the original.

For example: Someone working abroad for six months gives their sister an ordinary power of attorney to manage their bank account.

See also: Lasting power of attorney (LPA)

Ordinary shares

The usual kind of share, with a vote and a share of the profits.

In plain English:The normal type of share. You get a vote and a share of any dividends, but you're paid last if the company closes.

MoreLess about Ordinary shares

Holders are paid last if a company fails, so they take the most risk.

They get the most from growth too.

For example: Someone buys ordinary shares in a supermarket and gets to vote at its yearly meeting and receive dividends.

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

Over-50s life insurance

Life insurance with no health questions for older people.

In plain English:Life insurance for older people with no health questions. Payouts are often small, and you can pay in more than it pays out.

MoreLess about Over-50s life insurance

It's often advertised with free gifts. If you die in the first year or two, it may only pay back what you've paid.

Saving the same money may leave your family more.

For example: Someone pays £20 a month from age 55. By 85 they've paid £7,200, more than the £5,000 the policy pays out.

Overconfidence (investing)

Believing you can predict markets better than you really can.

In plain English:Thinking you know more than you do, like believing you can pick winning shares. It often leads to trading too much and losing money.

MoreLess about Overconfidence (investing)

Many people think they're above-average investors. Keeping a record of past decisions helps check this.

Spreading money widely and trading less can help.

For example: After a few lucky trades, someone puts all their savings into one share, sure it will rise. It falls by half.

See also: Diversification

Overdraft

Borrowing by going below zero in your current account.

In plain English:Your bank lets you spend more than you have in your current account, up to a limit. It's borrowing, and interest can be high.

MoreLess about Overdraft

Most banks charge a single interest rate, often high. Going past your limit can bring refused payments.

It shows on your credit file.

For example: Someone with a £500 arranged overdraft goes £200 below zero and pays interest on the £200 until they're back in credit.

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

Overdraft buffer

A small amount some banks let you go overdrawn without any interest.

In plain English:Some banks let you go a small amount into your overdraft without charging any interest.

MoreLess about Overdraft buffer

Not every bank offers one. Check how your bank charges once you go past it.

For example: A bank lets customers go up to £50 overdrawn for free. Someone goes £30 overdrawn and pays nothing.

Overpayment (mortgage)

Paying more off your mortgage than you have to.

In plain English:Paying more than your monthly mortgage payment. It cuts what you owe faster and saves interest. Check your lender's limits first.

MoreLess about Overpayment (mortgage)

It can be done as a lump sum or by paying more each month. Some lenders lower the monthly payment; others shorten the term.

Keep enough savings for emergencies first.

For example: Someone overpays £100 a month on a £150,000 mortgage, cutting years off the term and saving thousands in interest.

Article inside Foliopeak: Remortgaging, and Overpaying the Mortgage vs Investing

Overtrading

Buying and selling far more often than needed, which eats into returns.

In plain English:Every trade has a cost. Trading a lot, often on news or feelings, means those costs pile up and returns usually fall.

MoreLess about Overtrading

Studies of private investors have found that the people who trade most often tend to earn the least once costs are taken off.

Apps that make trading feel like a game can push people to trade more. A simple plan and checking prices less often can help.

For example: Someone makes 100 trades in a year at £5 each. That's £500 in dealing charges before any spread, which someone who buys and holds wouldn't pay.

Article inside Foliopeak: Trading vs Investing