Money Terms in Plain English.

P

P/E ratio (price to earnings)

A share price compared with the company's profit per share.

In plain English:A share price divided by the profit each share earns. A high number means investors expect strong growth, or the share is pricey.

MoreLess about P/E ratio (price to earnings)

Low P/E shares can be cheap or in trouble. Comparing with similar companies helps.

For example: A share at £20 in a company earning £1 a share has a P/E of 20.

P11DUK

The form listing the perks and expenses your employer gave you in a tax year.

In plain English:A form your employer sends HMRC after each tax year listing perks they gave you, like a company car or health cover, so they can be taxed.

MoreLess about P11D

Employers must send it by 6 July after the tax year ends. You should get a copy.

The benefits are usually taxed through your tax code.

For example: An employee with a company car and private medical insurance gets a copy of their P11D showing the value of both.

P45UK

The form you get when you leave a job, showing your pay and tax so far.

In plain English:When you leave a job, your employer gives you this form showing your pay and tax so far that year. Give it to your next employer.

MoreLess about P45

It has four parts. Keep your copy, as you may need it for tax.

Not having one can mean an emergency tax code.

For example: Someone leaves a job in October and gives their P45 to their new employer, so their tax code is right straight away.

Article inside Foliopeak: Taking a Career Break: What Time Out Does to Your Tax, Pension and State Pension

P60UK

The yearly summary of your pay and tax from your employer.

In plain English:After each tax year, your employer gives you this summary of your total pay and the tax you paid. Keep it safe.

MoreLess about P60

You should get it by 31 May. Keep it as proof of income.

It can be useful for mortgage applications and tax refunds.

For example: Someone applying for a mortgage sends their P60 to show their income for the year.

P800 (tax calculation letter)UK

A letter from HMRC saying you paid too much or too little tax last year.

In plain English:A letter HMRC sends after the tax year if you paid the wrong amount of tax through your job or pension. It shows if you're owed money or owe some.

MoreLess about P800 (tax calculation letter)

It usually arrives between June and November. Check it's right against your own records.

Scammers send fake versions, so log in to your HMRC account to check.

For example: Someone gets a P800 saying they paid £200 too much tax and claims the refund online.

See also: Underpaid tax

P85 (leaving the UK)UK

The form that tells HMRC you've left the UK, so it can pay back tax you overpaid.

In plain English:A form you send HMRC when you leave the UK to live abroad, so it can pay back any tax you've overpaid.

MoreLess about P85 (leaving the UK)

You can fill it in online. You may need your P45.

For example: Earn £20,000 from April and move abroad in September. You may get about £1,257 back, because only half your Personal Allowance was used.

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

Article inside Foliopeak: Moving Abroad or Coming Back: Your State Pension, ISA and Credit File

Packaged bank account

A current account with a monthly fee that comes with extras such as insurance.

In plain English:A current account with a monthly fee that comes with extras like travel or phone insurance. It's only worth it if you'd use the extras.

MoreLess about Packaged bank account

Banks must check you're eligible for the insurance. Complaints about mis-sold accounts can still be made.

For example: Someone pays £15 a month for a packaged account with travel insurance, but finds it doesn't cover their medical condition.

Panic selling

Selling in a rush out of fear when prices are falling.

In plain English:Prices fall, fear spreads and people sell to make it stop. They often sell near the bottom and miss the bounce back.

MoreLess about Panic selling

Some of the biggest daily rises in markets have come within days of the worst falls, so selling in a panic can miss them.

A plan made in calm times, such as how much to keep in cash, makes it easier not to sell in a scare.

For example: Someone sells their whole fund after a sharp fall in March 2020. By the end of the year, the market had more than recovered.

Article inside Foliopeak: Trading vs Investing

Parental settlement rulesUK

Rules that tax a parent on income from money they gave their child.

In plain English:If a parent gives money to their child and it earns more than a small amount of interest a year, the parent is taxed on it.

MoreLess about Parental settlement rules

The limit is £100 a year of interest or other income, and over it all of that income is taxed as the parent's.

It's to stop parents moving income to children to use their allowances. Gifts from grandparents aren't caught.

For example: A parent puts money in a savings account for their child. When the interest goes over £100 in a year, all of it is taxed as the parent's income.

Partnership

A business owned by two or more people together.

In plain English:A business run by two or more people who share the profits. In an ordinary partnership, each partner is responsible for all its debts.

MoreLess about Partnership

Partners file their own tax returns and the partnership files one too. A partnership agreement sets out who gets what.

LLPs must file accounts at Companies House.

For example: Two accountants run their business as a partnership, sharing profits 50:50 and each paying tax on their half.

Partnership relief (stamp duty)UK

A stamp duty relief for moving property from a genuine partnership into a company the partners own.

In plain English:If a genuine property partnership moves its homes into a company the partners own, it may pay little or no stamp duty.

MoreLess about Partnership relief (stamp duty)

It's complex, and advice is important. HMRC looks closely at these.

For example: A family property partnership moves its rental homes into a company owned in the same shares, paying little Stamp Duty.

Article inside Foliopeak: Moving a Let Property Into a Company

Pay yourself first

Saving as soon as you're paid, before spending on anything else.

In plain English:Move money into savings the moment you get paid, before you spend on anything else, so saving actually happens.

MoreLess about Pay yourself first

It makes saving automatic and stops it depending on what's left.

Even small amounts help build the habit.

For example: On payday, £200 moves automatically into savings before any spending.

See also: Direct Debit and standing order

Payday loan

A short, very expensive loan meant to be repaid on your next payday.

In plain English:A short loan meant to be paid back on your next payday. It costs a lot, and rolling it over can quickly lead to bigger debt.

MoreLess about Payday loan

Daily interest and default fees are also capped. Rolling over a loan adds costs.

Other help, like credit unions, can be cheaper.

For example: Someone borrows £300 for a month. Under FCA caps, they'll never have to repay more than £600 in total.

PAYE (Pay As You Earn)UK

The system that takes tax from your pay before it reaches you.

In plain English:Short for Pay As You Earn. Your employer takes Income Tax and National Insurance from your pay and sends it to HMRC before you get paid.

MoreLess about PAYE (Pay As You Earn)

PAYE stands for Pay As You Earn. Tax is spread across the year.

Your tax code tells your employer how much to take.

For example: Someone's employer takes income tax and National Insurance from their pay each month before it reaches their bank.

Article inside Foliopeak: Your Tax Code and Your Payslip

Payment for order flow

Money a trading app gets for sending your orders to a particular firm.

In plain English:Some free trading apps make money by passing your orders to big trading firms that pay them. You may pay through a slightly worse price.

MoreLess about Payment for order flow

It's one way that trading with no dealing charge gets paid for.

If an app doesn't charge for trades, it's worth checking how it makes its money, for example through the spread or currency fees.

For example: An app charges nothing to buy a share, but sends the order to a firm that pays it a small amount per trade. The price may be a fraction worse than elsewhere.

Article inside Foliopeak: How Buying and Selling Shares Works

Payment holiday

An agreed break from paying a mortgage or loan, while interest usually keeps adding up.

In plain English:Your lender agrees you can stop or lower your payments for a while. Interest usually keeps building up, so you pay more overall.

MoreLess about Payment holiday

It may affect your credit file, depending on how it's recorded. Ask how it will show.

For example: Someone loses their job and agrees a three-month payment holiday on their mortgage, then pays a bit more each month afterwards.

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

Payment in lieu of notice (PILON)UK

Pay for your notice period when your employer ends your job straight away.

In plain English:Short for pay in lieu of notice. If your employer ends your job straight away, they pay you for the notice period instead. It's taxed like normal pay.

MoreLess about Payment in lieu of notice (PILON)

PILON stands for payment in lieu of notice. Your contract may say whether it can be paid.

It's separate from redundancy pay.

For example: An employer ends someone's job straight away and pays one month's salary for the notice period, taxed as normal pay.

Article inside Foliopeak: Made Redundant: What an Employee Is Owed, How It Is Taxed, and Where the Money Can Go

Payments on accountUK

Advance payments towards next year's Self Assessment tax bill.

In plain English:If you pay tax through Self Assessment, you may have to pay towards next year's bill in two payments in advance.

MoreLess about Payments on account

Each is 50% of last year's bill, due 31 January and 31 July. They don't apply if last year's bill was under £1,000, or if 80% or more of your tax was already taken off before you were paid.

You can ask to lower them if you expect your income to fall.

For example: If last year's bill was £4,000, you pay £2,000 by 31 January and £2,000 by 31 July towards this year's.

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

Article inside Foliopeak: Payments on Account, and Why January Is a Double BillCalculator: Sole Trader Tax Calculator

Payroll GivingUK

Giving to charity straight from your pay before tax.

In plain English:Giving to charity straight from your pay before tax is taken, so it costs you less than the amount the charity gets.

MoreLess about Payroll Giving

Your employer must offer a scheme for you to use it. Some charities get extra from employers.

For example: Someone gives £10 a month to a charity through payroll giving, which costs them £8 after tax relief at the basic rate.

Payslip

The statement showing your pay and what was taken off it.

In plain English:The note your employer gives you each payday showing what you earned, what was taken off, like tax and pension, and what you got.

MoreLess about Payslip

Check it for the right tax code and deductions. Employers must give one by law.

Keep them as proof of earnings.

For example: Someone spots their payslip has the wrong tax code and contacts HMRC to fix it.

Article inside Foliopeak: Your Tax Code and Your Payslip

PCP (personal contract purchase)

Car finance with low monthly payments and a big final payment.

In plain English:A car finance deal with low monthly payments and a big final payment. At the end, you can pay it to keep the car, hand it back or swap for a new one.

MoreLess about PCP (personal contract purchase)

PCP stands for personal contract purchase. Mileage limits and damage charges apply.

You can end the deal early once you've paid half the total.

For example: Someone pays £250 a month for three years, then hands the car back instead of paying the £10,000 balloon.

Article inside Foliopeak: Car Finance: PCP, Hire Purchase and Leasing

Peer-to-peer lending

Lending your money to people or businesses through a website.

In plain English:You lend money to people or businesses through a website and earn interest. If borrowers don't pay back, you lose money, and there's no FSCS protection.

MoreLess about Peer-to-peer lending

Platforms spread your money across many loans. Some have closed or struggled.

It can be held in an Innovative Finance ISA.

For example: Someone lends £1,000 through a platform at 6%. A few borrowers don't repay, and their return ends lower.

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

Penny shares

Very cheap shares in tiny companies, often hard to sell.

In plain English:Shares in tiny companies that cost very little each. They can swing wildly, be hard to sell and are often used in scams.

MoreLess about Penny shares

Their prices can swing widely. They're often promoted by boiler room scams.

Some are traded on AIM.

For example: Someone buys penny shares after a cold call. They can't find a buyer when they want to sell.

Pension charge capUK

A limit on the yearly charges in a workplace pension's default fund.

In plain English:A limit on how much the main fund in a workplace pension can charge you each year, to protect people who don't choose a fund.

MoreLess about Pension charge cap

The cap is 0.75% a year of the pot.

It includes most fees. Many schemes charge well below it.

Flat fees are allowed in some cases.

For example: A worker's default pension fund charges 0.4% a year, well below the cap.

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

Pension commencement lump sum (PCLS)UK

The formal name for the tax-free cash you take from a pension.

In plain English:The official name for the tax-free cash you can take when you start using your pension.

MoreLess about Pension commencement lump sum (PCLS)

It's often called PCLS. You don't have to take it all at once.

For example: Someone takes their pension commencement lump sum to pay off their mortgage when they retire.

Article inside Foliopeak: The 25% Tax-Free Lump Sum, and the Allowances That Replaced the Lifetime Allowance

Pension CreditUK

A top-up for pensioners on a low income.

In plain English:Extra money for people over State Pension age on a low income. It can also unlock other help, like with Council Tax and heating.

MoreLess about Pension Credit

You can claim it up to three months before or after reaching State Pension age. Many who qualify don't claim.

It can also unlock a free TV licence for over-75s.

For example: A pensioner with a small State Pension claims Pension Credit, which tops up their income and helps with Council Tax.

Pension freedomsUK

Rules that let you take your pension savings how you choose.

In plain English:Since two thousand fifteen, once you reach the minimum age, you can take your pension pot as cash, an income or a mix, as you choose.

MoreLess about Pension freedoms

They started in April 2015.

They give choice but need care, as money can run out. Pension Wise offers free help.

Scams increased after they started.

For example: Someone takes their pension as a mix of lump sums and drawdown, using the freedom to choose.

Article inside Foliopeak: Taking Your Pension - the Spending Side

Pension funds

The big pots of money pension schemes invest to pay people's pensions.

In plain English:Large pools of money that pension schemes invest in shares, bonds and property, so they can pay people's pensions in future.

MoreLess about Pension funds

They invest for decades, so they hold long-term investments. Some are run by trustees.

Their choices affect markets.

For example: A large pension fund buys a big stake in a UK infrastructure project.

See also: Retail and institutional investors

Pension Protection Fund (PPF)UK

Pays compensation when a company with a final salary pension goes bust.

In plain English:If a company with a final salary pension goes bust and the scheme can't pay, this fund steps in and pays most of what members were promised.

MoreLess about Pension Protection Fund (PPF)

It usually pays most of what was promised, with a cap for some. It's funded by a levy on schemes.

For example: When an employer went bust, its pension scheme moved into the PPF, and members kept getting most of their pensions.

Pension recyclingUK

Taking tax-free cash from a pension and paying it back in, which HMRC can tax heavily.

In plain English:Taking tax-free cash from your pension and paying it straight back in to get more tax relief. HMRC can charge heavy tax on this.

MoreLess about Pension recycling

HMRC looks at the size and whether it was planned. Advice can help avoid problems.

For example: Someone takes a large tax-free lump sum and pays it straight back into their pension. HMRC treats it as recycling and taxes it.

Article inside Foliopeak: The 25% Tax-Free Lump Sum, and the Allowances That Replaced the Lifetime Allowance

Pension scam

A scheme designed to take your pension savings, often by offering early access.

In plain English:Scammers promise to unlock your pension early or offer amazing returns, then steal your savings. Be wary of cold calls about pensions.

MoreLess about Pension scam

Money taken before the minimum pension age can bring tax charges of up to 55% of it.

Warning signs include cold calls, promises of high returns and pressure to act. Check firms on the FCA register.

For example: A caller offers to unlock someone's pension at 45. It's a scam, and they'd face a large tax bill too.

Pension sharing orderUK

A court order that splits a pension on divorce.

In plain English:A court order on divorce that splits a pension, so part of it moves into a pension in the other partner's name.

MoreLess about Pension sharing order

It's one way pensions are dealt with on divorce. Others include offsetting against other assets.

Pensions can be the largest asset in a divorce.

For example: A court orders 40% of a husband's pension to be moved into his ex-wife's own pension.

Article inside Foliopeak: Separation and Money: Dividing What You Built Together

Pension tax reliefUK

Tax back from the government on what you pay into a pension.

In plain English:When you pay into a pension, the government adds back the tax you paid on that money. Higher earners can claim back more.

MoreLess about Pension tax relief

It's at your highest rate of income tax, on up to your earnings for the year (or £3,600, including the tax relief, if you have no earnings), within the annual allowance.

Basic rate relief is often added by the provider. Higher rate relief may need claiming.

For example: A basic-rate taxpayer pays £80 into a personal pension and the government adds £20, so £100 goes in.

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

Article inside Foliopeak: How Pension Tax Relief Works

Pension Tracing ServiceUK

A free service that helps you find lost pensions.

In plain English:A free government service that helps you find contact details for old pensions you may have lost track of.

MoreLess about Pension Tracing Service

It's free and run by the government. Be wary of firms charging for the same thing.

For example: Someone uses the free service to find an old pension from a job they had in their 20s.

Article inside Foliopeak: Do You Know What's in Your Pension?

Pension transfer

Moving a pension pot to another provider.

In plain English:Moving your pension from one provider to another. Check for fees, lost guarantees and scams before you do.

MoreLess about Pension transfer

Defined benefit transfers above a certain size need advice. Check for guarantees before moving.

For example: Someone combines three small pensions into one, after checking none has valuable guarantees.

Article inside Foliopeak: Consolidating Old Pensions

Pension WiseUK

Free government guidance on your options for taking a pension.

In plain English:A free government service, part of MoneyHelper, that explains your choices for taking money from a pension, once you're fifty or over.

MoreLess about Pension Wise

It's for people aged 50 or over.

Appointments are free and can be by phone or in person. It's guidance, not advice.

For example: At 55, someone books a Pension Wise appointment to understand their options.

Article inside Foliopeak: Drawdown vs Annuity, in Plain English

Pensions dashboardUK

A planned service to see all your pensions in one place online.

In plain English:A planned website where you'll be able to see all your pensions, including the State Pension, in one place. It's still being built.

MoreLess about Pensions dashboard

Every pension scheme had to connect by 31 October 2026.

It should help people find lost pensions. It will be free.

For example: Once the dashboard opens, someone will be able to see all their pensions in one place.

Article inside Foliopeak: Do You Know What's in Your Pension?

Pensions OmbudsmanUK

A free service that settles complaints about how a pension scheme was run.

In plain English:If a pension scheme has treated you unfairly and won't fix it, this free service can look into your complaint.

MoreLess about Pensions Ombudsman

It can order schemes to put things right. It's free to use.

For example: A pension scheme takes months to pay someone's lump sum. The Ombudsman orders it to pay interest for the delay.

See also: Financial Ombudsman Service

People with significant control (PSC)UK

The people who own or control a company, who must be listed at Companies House.

In plain English:Anyone who owns or controls more than a quarter of a company must be named on the public register at Companies House.

MoreLess about People with significant control (PSC)

It's called the PSC register. It's meant to make ownership clear.

For example: Someone owns 30% of a company, so they're listed at Companies House as a person with significant control.

See also: Companies House

PEP (politically exposed person)

Someone with an important public job, who banks must make extra checks on.

In plain English:Short for politically exposed person. If you, or a close relative, have an important public job, banks must check your accounts more carefully.

MoreLess about PEP (politically exposed person)

PEP stands for politically exposed person. Checks can mean extra questions when opening accounts.

For example: An MP's partner opens a bank account and is asked extra questions about where their money comes from.

See also: Anti-money laundering checks (AML)

Persistent debtUK

Rules that help when you have paid more in card interest than off the balance.

In plain English:If you've paid more in interest and charges on a credit card than off the balance for a long time, your card company must help you clear it faster.

MoreLess about Persistent debt

The provider may suggest raising payments. If you can't, it may freeze interest.

For example: After 18 months of paying mainly interest, someone's card provider writes suggesting they pay more each month.

Personal AllowanceUK

The income you can have each year before paying income tax.

In plain English:The amount of income you can earn each year without paying any Income Tax. Most people get the same amount.

MoreLess about Personal Allowance

It's £12,570. It shrinks by £1 for every £2 of adjusted net income over £100,000, and is gone by £125,140.

Blind people can get extra. Marriage allowance lets you transfer some.

For example: Earn £30,000 and the first £12,570 is tax-free, so income tax is charged on £17,430.

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

Personal Allowance taper (the 60% tax trap)UK

Losing your tax-free allowance on high income, so part of your pay is taxed at a much higher rate.

In plain English:Once your income goes over a high limit, your tax-free amount shrinks, so part of your pay is taxed at a very high rate.

MoreLess about Personal Allowance taper (the 60% tax trap)

It starts at £100,000 of adjusted net income and the allowance is all gone at £125,140.

It affects many people as pay rises. Bonuses can push you into it.

For example: Someone earning above the taper start gets a pay rise. Pension payments can bring their income back down.

See also: Adjusted net income

Personal contract hire (leasing)

Leasing a car for a set time without ever owning it.

In plain English:You pay monthly to use a new car for a set time, then hand it back. You never own it, and there are mileage limits.

MoreLess about Personal contract hire (leasing)

It's often cheaper monthly than buying. Insurance is still your responsibility.

For example: Someone leases a car for three years at £300 a month, then hands it back.

Article inside Foliopeak: Car Finance: PCP, Hire Purchase and Leasing

Personal guarantee

A promise to pay a business debt from your own money.

In plain English:You promise to pay a business's debt from your own money if the business can't. It can put your home at risk.

MoreLess about Personal guarantee

Lenders often ask for one from small company directors. It can put your home at risk.

For example: A director signs a personal guarantee for a business loan. When the company fails, the bank asks them to repay it.

Personal Independence Payment (PIP)Applies in England, Wales, Northern IrelandEnglandWalesN. Ireland

Money towards the extra costs of a long-term illness or disability.

In plain English:Weekly money for adults with a long-term illness or disability that makes daily life or getting around harder. It isn't based on income.

MoreLess about Personal Independence Payment (PIP)

It has a daily living part and a mobility part. Assessments decide rates.

For example: Someone with arthritis claims PIP to help with the extra costs of daily living.

Personal loan

A fixed loan repaid in equal monthly amounts.

In plain English:You borrow a set amount and pay it back in equal monthly payments over a set time, at a fixed interest rate.

MoreLess about Personal loan

Rates depend on your credit and the amount. Lower rates often come with bigger loans.

For example: Someone borrows £5,000 over three years to buy a car, paying a fixed amount each month.

Personal pension

A pension you set up yourself rather than through work.

In plain English:A pension you open yourself, not through your job. The government adds tax relief to what you pay in.

MoreLess about Personal pension

You choose investments and pay in what you want. Employers can pay in too.

For example: A self-employed designer opens a personal pension and pays in each month.

Article inside Foliopeak: Pensions: SIPPs, Workplace Pensions, and SSAS

Personal Savings AllowanceUK

The savings interest you can earn each year before tax is due.

In plain English:Each year, you can earn some interest on your savings without paying tax. Basic rate taxpayers get more than higher rate taxpayers.

MoreLess about Personal Savings Allowance

It's £1,000 for a basic-rate taxpayer, £500 for a higher-rate one, and none for an additional-rate taxpayer.

Interest is paid without tax taken off. HMRC collects tax on anything above it.

For example: A basic-rate taxpayer can earn £1,000 of savings interest a year before tax, and a higher-rate taxpayer £500.

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

Article inside Foliopeak: Tax on Savings Interest

Personal tax accountUK

Your online account with HMRC.

In plain English:Your own online HMRC account, where you can check your tax code, National Insurance record and State Pension forecast.

MoreLess about Personal tax account

You can sign in using the HMRC app. It's free.

For example: Someone checks their personal tax account and finds an old pension they'd forgotten.

Article inside Foliopeak: Your Tax Code and Your Payslip

Phishing

Fake messages that try to trick you into giving away details or money.

In plain English:Fake emails, texts or calls that pretend to be from your bank or a company, trying to get your details or money. Never click links you don't trust.

MoreLess about Phishing

Look for wrong email addresses and urgent requests. Banks won't ask for your password.

For example: Someone gets a text saying their bank account is locked, with a link. It's phishing, so they delete it.

Article inside Foliopeak: Spotting an Investment Scam

Phoenix companyUK

A new company that carries on the business of one that went bust, leaving its debts behind.

In plain English:When a company goes bust and its owners start a new one doing the same thing, often leaving debts behind. It can be illegal.

MoreLess about Phoenix company

It's often seen with businesses that fail more than once. Creditors lose out.

For example: A building firm goes bust owing suppliers. The same directors start a new firm with a similar name the next week.

Physical and synthetic ETFs

Funds that either own what they track or copy it through a contract.

In plain English:A physical ETF actually owns the shares in its index. A synthetic one uses a deal with a bank to copy the index's return instead.

MoreLess about Physical and synthetic ETFs

Synthetic ETFs can track hard-to-reach markets. Rules limit the risk.

For example: A synthetic ETF tracks an index through a swap with a bank, instead of holding the shares.

Placing

A company selling new shares straight to chosen investors to raise money.

In plain English:A company needs cash, so it sells new shares to big investors, often a bit below the market price. Everyone else's slice gets smaller.

MoreLess about Placing

Unlike a rights issue, existing shareholders don't all get the chance to buy. Some placings add a smaller offer for private investors through platforms.

The share price often dips when a placing is announced, as the new shares are priced below it.

For example: A company worth £100 million sells £10 million of new shares to funds at a 5% discount. Someone who owned 1% now owns a little less.

Platform fee

What an investment platform charges to hold your investments.

In plain English:A fee for holding your investments on a platform. It may be a share of your money or a fixed amount, so it pays to compare.

MoreLess about Platform fee

Fees can be capped for large pots. Compare platforms as your pot grows.

For example: A fee of 0.25% a year on £20,000 is £50.

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

Platform reporting (selling online)UK

Online selling sites telling HMRC what their sellers earn.

In plain English:Sites like eBay and Vinted now tell HMRC what their sellers earn, so people selling a lot or running a side business may owe tax.

MoreLess about Platform reporting (selling online)

It started in 2024. Sellers get a copy of what's reported.

For example: Someone selling handmade jewellery on a marketplace finds their earnings have been reported to HMRC.

Pocket money and children's bank cards

Cards and apps that let children spend pocket money while parents keep an eye on it.

In plain English:Prepaid cards and apps for children, so they can spend their pocket money while parents can see what they spend and set limits.

MoreLess about Pocket money and children's bank cards

They help children learn about money. Check for fees and protections.

For example: A parent loads £10 a week onto their child's card and sees what it's spent on in the app.

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

Poison pill

A defence some US companies use to make a hostile takeover too costly.

In plain English:A trick some companies use to stop an unwanted takeover, like letting other shareholders buy cheap new shares to make the bid too expensive.

MoreLess about Poison pill

It's meant to give a board time to negotiate. Critics say it protects management.

For example: A US company lets shareholders buy cheap shares if a bidder buys 15%, making a takeover very costly.

See also: Hostile takeover

Ponzi scheme

A fraud that pays earlier investors with newer investors' money, until it collapses.

In plain English:A scam that pays old investors with money from new investors, not real profits. When new money dries up, it collapses and most people lose.

MoreLess about Ponzi scheme

It's named after Charles Ponzi, who ran one in the 1920s. The biggest was Bernie Madoff's.

For example: A scheme promises 2% a month, paying old investors with new investors' money until it collapses.

Article inside Foliopeak: Spotting an Investment ScamGame: Scam or Legit

Portfolio

All your investments looked at together.

In plain English:All your investments taken together, like your shares, funds and bonds.

MoreLess about Portfolio

Looking at it as a whole helps you see if it's balanced. It can include pensions and ISAs.

For example: Someone adds up their ISA, pension and savings and sees they hold more in shares than they thought.

Portfolio landlordUK

A landlord with several mortgaged buy-to-lets, who lenders check more closely.

In plain English:A landlord with four or more mortgaged rental homes. Lenders look at the whole lot before lending on another.

MoreLess about Portfolio landlord

It means 4 or more mortgaged buy-to-let properties.

Lenders check each property's income and costs. Rules came in 2017.

For example: A landlord with five mortgaged homes applies for another mortgage and sends a business plan with details of all of them.

See also: Buy-to-let

Porting

Taking your mortgage deal with you to a new home.

In plain English:If you move home during a mortgage deal, you may be able to take the deal with you, so you avoid early repayment charges.

MoreLess about Porting

Borrowing more may mean a new rate on the extra. Timing between sale and purchase matters.

For example: Someone moves house and ports their fixed rate, borrowing a bit more at a new rate.

Article inside Foliopeak: Fixes, Trackers, and What Overpaying Really Does

Potentially exempt transfer (PET)UK

A gift that becomes free of Inheritance Tax if you live long enough after it.

In plain English:A gift to a person that becomes completely free of Inheritance Tax if you live for seven years after giving it.

MoreLess about Potentially exempt transfer (PET)

It's free of Inheritance Tax if the giver lives 7 more years. If they die sooner it counts back into the estate, and taper relief can reduce the tax on it after 3 years.

Keep records of gifts and dates. Annual exemptions can be used too.

For example: A father gives his son £50,000 and lives another 7 years, so the gift is completely outside his estate.

Article inside Foliopeak: The Seven-Year Rule and Gifting to Children

Pound-cost averaging

Investing a fixed amount regularly, whatever prices are doing.

In plain English:Investing the same amount every month. When prices are low, your money buys more, and when they're high it buys less.

MoreLess about Pound-cost averaging

It removes the worry of picking a time to invest. It doesn't guarantee a profit.

For example: Investing £200 every month buys more units when prices are low and fewer when they are high.

PPI (payment protection insurance)UK

Insurance often mis-sold with loans and cards, now closed to complaints.

In plain English:Insurance often sold with loans and credit cards that many people didn't need. Millions got money back, but the deadline for complaints has passed.

MoreLess about PPI (payment protection insurance)

The deadline for complaints was 29 August 2019.

PPI stands for payment protection insurance. Many people were sold it without asking, or couldn't have claimed on it.

Banks paid back billions of pounds in compensation. Firms still calling about PPI claims are likely scams.

For example: Someone found they'd been sold PPI with a loan they didn't need it for, and got back what they paid plus interest before the deadline.

PRA (Prudential Regulation Authority)UK

The part of the Bank of England that checks banks and insurers are safe.

In plain English:Part of the Bank of England that makes sure banks, building societies and insurers are strong enough to stay safe.

MoreLess about PRA (Prudential Regulation Authority)

PRA stands for Prudential Regulation Authority. It sets how much money banks must hold to cover losses.

It aims to stop banks failing, or to let them fail without harming the wider system.

For example: The PRA tells banks to keep more money in reserve after checking how they'd cope in a deep recession.

See also: FCA (Financial Conduct Authority)

Pre-existing condition

An illness you had before taking out insurance.

In plain English:A health problem you already had before you took out insurance. Many policies won't cover it, or charge more.

MoreLess about Pre-existing condition

Not telling an insurer can mean a claim is turned down or the policy is cancelled. Some insurers specialise in covering these conditions.

For example: Someone with asthma declares it when buying travel insurance, paying a little more so it's covered abroad.

Pre-market and after-hours trading

Trading in US shares before the market opens or after it closes.

In plain English:Trading in American shares before the market officially opens or after it closes. Prices can jump more because fewer people trade.

MoreLess about Pre-market and after-hours trading

Some UK platforms now offer it for US shares. Orders may not go through at the price you expect.

Big news, such as results, often comes out outside normal hours.

For example: A US company reports results after the market closes, and its shares jump 10% in after-hours trading.

See also: Bid-offer spread

Pre-owned assets taxUK

Income tax on something you gave away but still use without paying for it.

In plain English:If you give something away, like your home, but keep using it without paying a fair rent, you may pay income tax on that benefit each year.

MoreLess about Pre-owned assets tax

It's often shortened to POAT. The charge is based on what a fair rent would be.

You can choose to have the asset count in your estate instead.

For example: A father gives cash to his daughter to buy a house, then lives in it rent-free. He may have to pay this tax each year.

Article inside Foliopeak: The Seven-Year Rule and Gifting to Children

Pre-trading expensesUK

Costs from before a business started that still come off its profit.

In plain English:Money you spent getting a business ready in the years before it started can still be taken off its profit once it's running.

MoreLess about Pre-trading expenses

It covers costs from the 7 years before trading started.

Keep receipts from before you start. They're claimed in your first tax return.

For example: Spend £600 on a website and £400 on adverts in the months before you start. The £1,000 comes off your first year's profit.

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

Article inside Foliopeak: What You Can - and Can't - Claim As a Business Expense

Preference shares

Shares paid before ordinary shares, usually with a fixed dividend and no vote.

In plain English:Shares that usually pay a fixed dividend and are paid before ordinary shares, but normally come with no vote.

MoreLess about Preference shares

They're a bit like a mix of shares and bonds. Some can be swapped for ordinary shares.

Dividends can usually only be paid if there's profit.

For example: Someone holds preference shares in a bank that pay a fixed dividend each year, before any dividend on ordinary shares.

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

Premium

The price you pay for an insurance policy.

In plain English:The amount you pay for insurance, monthly or yearly.

MoreLess about Premium

Prices often rise at renewal, so it's worth comparing. Paying monthly can cost more than yearly.

Insurers can't charge existing customers more than new ones for the same home or car cover.

For example: Someone's car insurance premium rises at renewal, so they shop around and find a cheaper deal.

Premium and discount (investment trusts)

When an investment trust's share price is above or below what its holdings are worth.

In plain English:If an investment trust's shares cost more than what it owns is worth, they're at a premium. If they cost less, they're at a discount.

MoreLess about Premium and discount (investment trusts)

Discounts can widen or narrow over time, adding to gains or losses. Some trusts buy back shares to narrow a discount.

For example: A trust's assets are worth £1 a share, but its shares cost 85p. That's a 15% discount.

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

Premium BondsUK

Government-backed savings that pay prizes in a monthly draw instead of interest.

In plain English:Savings backed by the government. Instead of interest, every bond is entered into a monthly prize draw, and prizes are tax-free. You can lose nothing, but might win nothing.

MoreLess about Premium Bonds

You can hold from £25 to £50,000. Prizes range from £25 to £1,000,000.

Over time, prizes may be worth less than interest from a good savings account.

For example: Someone holds bonds for a year and wins two small prizes, both tax-free.

Figures checked 9 October 2026. Source: nsandi.com (opens in a new tab)

Article inside Foliopeak: Premium Bonds

Prenuptial agreement

An agreement before marriage on how money would be split if it ended.

In plain English:An agreement a couple makes before marrying about how money would be split if they divorce. Courts usually follow a fair one.

MoreLess about Prenuptial agreement

It works best if signed well before the wedding, with full details of each person's money. It can be updated.

For example: A couple with children from earlier marriages sign a prenup to protect what they each want to leave their children.

Price comparison site

A website that shows deals from many companies side by side.

In plain English:A website that lines up deals from many firms, like insurance or energy. Not every company is on every site.

MoreLess about Price comparison site

Results can be ranked in ways that favour some providers. Check what's covered, not just the price.

Using more than one site gives a wider view.

For example: Someone finds cheaper home insurance on a comparison site, then checks it has the same cover as before.

Article inside Foliopeak: Making a Budget, Alone or Together

Price target

The price an analyst expects a share to reach within a set time.

In plain English:An analyst says where they think a share price is heading. It's a guess based on their forecasts, not a promise.

MoreLess about Price target

Different analysts often give very different targets for the same share.

Targets tend to follow the price, rising after it rises and falling after it falls, so they're a weak guide on their own.

For example: A share trades at £8 and an analyst sets a price target of £10. A year later it's at £7, and the target has been cut to £8.50.

Price to book ratio (P/B)

A share's price compared with what the company's assets minus its debts are worth.

In plain English:A company's share price compared with what its accounts say it's worth. Below one can mean it looks cheap, or that something is wrong.

MoreLess about Price to book ratio (P/B)

It's most useful for banks and insurers, whose assets are mostly money. Tech firms often have high ratios.

For example: A bank's shares trade at £8, and its assets minus debts are £10 a share. Its price to book ratio is 0.8.

Article inside Foliopeak: Stocks, Shares and Equities

Private credit

Loans to companies from investment funds rather than banks.

In plain English:Funds that lend money to companies directly instead of banks. It can pay well, but money is locked in and it's hard to see the risks.

MoreLess about Private credit

It has grown quickly since 2008, as banks lent less. Some worry about risks building up.

Funds may charge high fees.

For example: A private credit fund lends £50 million to a mid-sized company at a higher rate than a bank would charge.

Private equity

Investing in companies that aren't on a stock exchange.

In plain English:Investing in companies that aren't listed on a stock market, often buying them, improving them and selling later.

MoreLess about Private equity

Firms often borrow heavily to buy companies. Returns can be high, but some deals go badly.

Everyday investors can invest through listed trusts.

For example: A private equity firm buys a restaurant chain, grows it for five years, then sells it at a profit.

Private key and seed phrase

The secret code and backup words that control your crypto, which you must never share.

In plain English:Your private key controls your crypto, and your seed phrase is a list of backup words that can rebuild it. Anyone who has them can take your coins.

MoreLess about Private key and seed phrase

A seed phrase is usually 12 or 24 words.

Write them down on paper and store safely, not in photos or email. Lost phrases can't be recovered.

For example: Someone loses their seed phrase and phone, and the coins in their wallet are gone for good.

Article inside Foliopeak: CryptocurrencyGame: Seed Phrase Safe

Private medical insurance (PMI)

Insurance that pays for private treatment.

In plain English:Insurance that pays for private hospital treatment, so you can skip NHS waiting lists. It usually doesn't cover conditions you already have.

MoreLess about Private medical insurance (PMI)

It can mean shorter waits and choice of hospital. Excesses and limits apply.

Existing conditions are often excluded.

For example: Someone with private medical insurance gets a knee operation within weeks instead of waiting months.

Private Residence ReliefUK

The rule that usually makes selling your own home free of Capital Gains Tax.

In plain English:When you sell the home you've lived in as your main home, you usually pay no Capital Gains Tax on the profit.

MoreLess about Private Residence Relief

The last nine months of ownership usually count even if you've moved out. Large gardens may not be covered.

For example: Someone sells their home after living in it for 10 years and pays no Capital Gains Tax on the gain.

Article inside Foliopeak: Selling a Home, a Second Home or a Let Property

Prize fund rate (Premium Bonds)UK

The average rate Premium Bonds pay out in prizes across everyone.

In plain English:The average return Premium Bonds pay out in prizes each year. Most people will get less than this, and some will get more.

MoreLess about Prize fund rate (Premium Bonds)

It was 4.35% for the October 2026 draw.

Wins depend on luck. The odds of winning anything in a month are given by NS&I.

For example: A saver with £1,000 in Premium Bonds wins nothing for a year, even though the prize fund rate is well above zero.

Figures checked 9 October 2026. Source: nsandi.com (opens in a new tab)

Article inside Foliopeak: Premium Bonds

Probate

The legal right to deal with someone's estate after they die.

In plain English:The legal permission to deal with someone's money and belongings after they die, like closing accounts and selling their home.

MoreLess about Probate

Small estates may not need it. Applying online is usually quickest.

Executors usually wait for it before selling property.

For example: After their mother dies, two sisters apply for probate so they can close her bank accounts and sell her house.

Article inside Foliopeak: What Actually Happens When You Die

Probate valueUK

What someone's belongings were worth on the day they died.

In plain English:What everything someone owned was worth on the day they died. It's used for Inheritance Tax and later Capital Gains Tax.

MoreLess about Probate value

Executors often get professional valuations for property. Getting it wrong can mean more tax later.

For example: A house is valued at £300,000 at death. When the son sells it a year later for £320,000, his gain is £20,000.

Article inside Foliopeak: Inheritance Tax Basics

Product transfer

Moving to a new mortgage deal with your current lender.

In plain English:When your mortgage deal ends, you switch to a new deal with the same lender. It's often quicker and simpler than moving lender.

MoreLess about Product transfer

It's often quicker and cheaper than moving lender. But other lenders may offer better rates.

For example: Someone's fixed rate ends and they switch to a new deal with their existing lender in a few clicks.

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

Professional indemnity insurance

Insurance against claims that your professional work cost a client money.

In plain English:Insurance for people who give advice or professional services, in case a client says a mistake cost them money.

MoreLess about Professional indemnity insurance

It covers legal costs and payouts. Claims can come years after the work.

For example: An architect is sued when a building design causes problems. Their professional indemnity insurance covers the claim.

Profit and loss account

A summary of a business's income, costs and profit over a period.

In plain English:A report showing what a business earned, what it spent and the profit or loss left over, usually for a year.

MoreLess about Profit and loss account

It's also called an income statement. Small companies file simpler versions.

For example: A shop's profit and loss account shows £200,000 of sales and £180,000 of costs, giving £20,000 profit.

Profit margin

Profit as a share of sales.

In plain English:How much of each pound of sales a business keeps as profit. A higher margin means it keeps more.

MoreLess about Profit margin

Margins differ a lot between industries. Supermarkets have thin margins; software firms often have wide ones.

For example: A company makes £1 million profit on £10 million of sales. Its profit margin is 10%.

See also: Operating profit and net profit

Profit warning

A company telling the market its profits will be lower than expected.

In plain English:A company announces its profits will be lower than expected. Its share price often falls sharply on the news.

MoreLess about Profit warning

Several warnings in a row can be a sign of deeper trouble. Prices sometimes recover.

For example: A retailer warns that Christmas sales were weak, and its shares fall 20% that morning.

Proof of reserves

A check that a crypto exchange really holds its customers' coins.

In plain English:A check meant to show a crypto exchange really holds all the coins its customers have with it. It doesn't show what it owes.

MoreLess about Proof of reserves

Some exchanges publish them regularly. They can't show hidden debts.

For example: After the collapse of a big exchange, others published proof of reserves to show customers' coins were there.

Article inside Foliopeak: The Crypto Rulebook: What Changes in October 2027

Proof of work and proof of stake

Two ways a blockchain chooses who checks and adds new transactions.

In plain English:With proof of work, computers race to solve puzzles to add transactions. With proof of stake, people lock up coins to get the job, using far less energy.

MoreLess about Proof of work and proof of stake

Proof of stake uses far less energy. Stakers can lose coins if they break the rules.

For example: Ethereum switched from proof of work to proof of stake in 2022, cutting its energy use sharply.

Article inside Foliopeak: Cryptocurrency

Property allowanceUK

A small amount of property income you don't need to report.

In plain English:If you earn only a small amount from property, like renting a driveway, you don't need to tell HMRC or pay tax on it.

MoreLess about Property allowance

It's £1,000 a year, counted before expenses.

It's often used for small amounts, like renting out a parking space. It can't be used with rent-a-room relief on the same income.

For example: Someone earns £600 a year renting out their driveway and doesn't need to tell HMRC.

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

Article inside Foliopeak: The £1,000 Trading and Property Allowances

Property chain

A line of home sales that each depend on the next.

In plain English:When buying one home depends on selling another, and so on down the line. If one sale falls through, they can all be delayed.

MoreLess about Property chain

Chain-free buyers or sellers are popular because they're quicker. Long chains raise the risk of delays.

For example: A first-time buyer's purchase depends on their seller buying another home, which depends on another sale.

Property searches

Checks a buyer's solicitor makes on a property before buying.

In plain English:Checks your solicitor makes before you buy a home, like planned roads, flood risk or drains, so there are no nasty surprises.

MoreLess about Property searches

They can reveal things like planned developments or flood risks. Lenders usually need them.

For example: A search shows a home is at high risk of flooding, so the buyer checks insurance costs before going ahead.

Protected pension ageUK

A right some people keep to take their pension earlier than the new minimum age.

In plain English:Some people whose pension scheme gave them the right to take their pension at a lower age can keep that right as the minimum age rises.

MoreLess about Protected pension age

It lets some members take their pension from 55 after the minimum pension age rises to 57, if their scheme's rules gave them that right by early November 2021.

Check with your scheme whether you have it. Moving as part of a group transfer may keep it.

For example: Someone in an old scheme with a protected pension age can still take their pension at the current minimum age after it rises.

Protected trust deedApplies in ScotlandScotland

Scotland's formal deal to repay part of your debts.

In plain English:In Scotland, a legal deal to pay back part of your debts over a set time. The rest is written off and lenders can't chase you.

MoreLess about Protected trust deed

It's set up by an insolvency practitioner. Creditors can object.

For example: Someone in Scotland with large debts signs a protected trust deed and pays what they can for four years.

See also: IVA (individual voluntary arrangement)

Proxy voting

Voting at a company's meeting without being there.

In plain English:If you own shares, you can vote at the company's meeting without going, by letting someone else vote for you.

MoreLess about Proxy voting

You can appoint someone else to vote for you. Big investors often vote for many shareholders.

For example: Someone votes on a company's pay policy online through their platform before the AGM.

See also: AGM (annual general meeting)

Public liability insurance

Insurance for a business against claims from the public.

In plain English:Insurance for a business in case a member of the public is hurt or their property is damaged because of its work.

MoreLess about Public liability insurance

It's often needed for working in other people's homes or at events. Councils and venues may ask for it.

For example: A gardener's ladder damages a customer's window. Their public liability insurance pays for it.

Pump and dump

A scam where people hype a small coin or share, then sell at the top.

In plain English:Scammers hype up a cheap share or coin to push its price up, then sell all theirs at the top, leaving others with big losses.

MoreLess about Pump and dump

It's illegal market manipulation for shares. Crypto ones are harder to stop.

For example: A group hypes a new coin online. Its price triples in hours, then the organisers sell and it crashes.

Article inside Foliopeak: Spotting an Investment ScamGame: Scam or Legit

Purchase card (0% interest)

A credit card that charges no interest on purchases for a set time.

In plain English:A credit card that charges no interest on things you buy for a set time. Pay it off before the offer ends, or interest kicks in.

MoreLess about Purchase card (0% interest)

It can help spread a big purchase. Set reminders before the offer ends.

For example: Someone buys a £900 washing machine on a 0% purchase card and pays it off over 12 months, paying no interest.

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

Purchasing power

How much your money can buy, which inflation lowers over time.

In plain English:How much your money can actually buy. When prices rise, the same money buys less.

MoreLess about Purchasing power

Prices rising 3% a year halve purchasing power in about 23 years. Investments that beat inflation keep it.

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

See also: Real return

Purchasing power parity (PPP)

Comparing countries by what money buys in each, rather than by exchange rates.

In plain English:A way to compare countries by what money really buys in each, rather than just using exchange rates.

MoreLess about Purchasing power parity (PPP)

It's used by bodies like the IMF and World Bank. A famous example is The Economist's Big Mac index.

For example: A burger costs £5 in the UK and the equivalent of £3 in another country, suggesting money goes further there.

See also: Purchasing power

Pyramid scheme

A scheme that pays people mainly for recruiting others, until it collapses.

In plain English:A scam where people mainly make money by signing up others, not by selling anything real. It always collapses and most people lose.

MoreLess about Pyramid scheme

They're often disguised as investment clubs or gifting circles. Some multi-level marketing schemes look similar.

For example: Someone pays £1,000 to join a "gifting circle", told they'll get £8,000 once they recruit others. It collapses and they lose their money.

See also: Ponzi scheme