Money Terms in Plain English.

R

R&D tax reliefUK

Tax relief for companies that spend on research and development.

In plain English:Companies working on new science or technology can get tax relief or cash back on what they spend developing it.

MoreLess about R&D tax relief

It needs projects to solve a scientific or technical problem. HMRC has cracked down on wrong claims.

For example: A software firm spends money developing a new type of encryption and claims R&D relief, cutting its Corporation Tax.

Real return

Your return after inflation is taken off.

In plain English:What your money really grew by once rising prices are taken into account. If savings earn less than inflation, your real return is negative.

MoreLess about Real return

It can be negative even when the return looks positive. Long-term planning should use real returns.

For example: Savings earning 4% while prices rise 3% grow about 1% a year in what they can buy.

Article inside Foliopeak: Inflation - the Quiet One

Real wages

Pay after taking rising prices into account.

In plain English:Your pay compared with the cost of things. If pay rises more slowly than prices, your real wages are falling.

MoreLess about Real wages

They fell in the UK between 2021 and 2023 as prices rose fast. They began rising again later.

For example: Someone's pay rises from £30,000 to £31,000, but prices rise 5%. Their real wages fall.

Article inside Foliopeak: Inflation - the Quiet One

Rebalancing

Bringing your investments back to the mix you planned.

In plain English:Over time, some investments grow faster than others and your mix drifts. Rebalancing means selling a bit of some and buying others to get back to your plan.

MoreLess about Rebalancing

Doing it once or twice a year is common. Some funds do it for you.

For example: You planned 60% shares and 40% bonds; shares rose to 70%, so you sell some shares and buy bonds to get back to your plan.

Article inside Foliopeak: Diversification and Rebalancing, Briefly

Recency bias

Expecting what happened lately to keep happening.

In plain English:Assuming what's just happened will keep happening, like expecting a share that's risen for months to keep going up.

MoreLess about Recency bias

It can lead to buying high and selling low. Looking at long-term history helps.

For example: After a strong year for tech shares, someone moves all their money into tech, expecting it to continue.

Recession

A time when the economy shrinks.

In plain English:When a country's economy shrinks for two quarters in a row. Jobs can be lost and businesses struggle.

MoreLess about Recession

They happen every few years on average. Central banks often cut interest rates in one.

For example: The UK had a short recession in 2020 when lockdowns closed much of the economy.

Record date (dividends)

The date you must be a shareholder by to get the next dividend.

In plain English:You need to be on the company's list of shareholders by this date to get the next dividend.

MoreLess about Record date (dividends)

Companies set it when they announce a dividend. Buying on the record date itself is too late.

For example: A company sets its record date as Friday, with the ex-dividend date Thursday. You must own shares by Wednesday.

See also: Ex-dividend date

Redeemable shares

Shares the company can buy back later on terms set at the start.

In plain English:Shares the company can buy back later, on terms set when they were issued.

MoreLess about Redeemable shares

They're often used by private companies. The company must have enough profit or capital to buy them back.

For example: A company issues redeemable shares to an investor, agreeing to buy them back in five years.

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

Redundancy payUK

Money you get when your job ends because it is no longer needed.

In plain English:If you lose your job because your employer no longer needs it done, you may get a payment based on your age, pay and years worked. Part of it is tax-free.

MoreLess about Redundancy pay

Statutory redundancy pay needs 2 years with the employer, and the first £30,000 of a redundancy payment is free of income tax and National Insurance.

Employers can pay more than the minimum. Payments for notice and holiday are taxed separately.

For example: Someone with several years at their job is made redundant and gets a payment, of which the first £30,000 is free of tax.

Figures checked 27 September 2026. Source: gov.uk (opens in a new tab)

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

Regular saver

A savings account with a higher rate if you pay in every month.

In plain English:A savings account that pays a higher interest rate, but you can only put in a set amount each month.

MoreLess about Regular saver

Interest is earned on a growing balance, so the actual interest is less than the rate suggests. Some need a current account.

For example: Someone saves £200 a month in a regular saver at 6%. After a year they've saved £2,400 and earned about £78 interest.

Article inside Foliopeak: Savings Accounts: Comparing Them Properly

REIT (real estate investment trust)

A company on the stock market that owns property and pays out most of its rent.

In plain English:A company on the stock market that owns property, like offices or warehouses, and must pay most of its rental income to shareholders.

MoreLess about REIT (real estate investment trust)

REIT stands for real estate investment trust. Dividends are taxed as property income.

They let you invest in property without buying it.

For example: Someone buys shares in a REIT that owns warehouses, getting regular dividends from the rent.

Relevant life policyUK

Life insurance a company pays for on behalf of an employee.

In plain English:Life insurance your company pays for, often for a director. It can save tax compared with paying for it yourself.

MoreLess about Relevant life policy

It's often used by small company directors. It doesn't count towards pension allowances.

For example: A company director's business pays for a relevant life policy. If they die, it pays their family through a trust.

Relief at sourceUK

A way of giving pension tax relief where the provider adds it for you.

In plain English:You pay into your pension from your take-home pay, and your provider claims basic rate tax relief and adds it for you. Higher earners claim the rest.

MoreLess about Relief at source

The provider claims relief at the basic rate (20%) from HMRC and adds it to your pot.

Non-taxpayers still get basic rate relief. Check your tax code or return claims the extra relief.

For example: Pay £80 in and the provider claims £20 from HMRC, so £100 goes in. A higher-rate taxpayer can claim another £20 back through Self Assessment.

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

Article inside Foliopeak: How Pension Tax Relief Works

Remortgage

Moving your mortgage to a new deal.

In plain English:Moving to a new mortgage deal, usually with a different lender, often when your current deal ends, to avoid a higher rate.

MoreLess about Remortgage

Start looking a few months before your deal ends. Fees and legal costs can apply.

For example: When your two-year fix ends, you move to a new five-year fix with another lender instead of going onto the standard variable rate.

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

Rent a Room SchemeUK

Lets you earn some rent tax-free from a lodger in your home.

In plain English:If you rent a furnished room in your home to a lodger, you can earn up to a set amount each year without paying tax.

MoreLess about Rent a Room Scheme

You can earn up to £7,500 a year tax-free this way. It's halved if someone else also has income from letting in the same home.

It applies automatically if income is below the limit. You can choose to use actual expenses instead.

For example: Rent a spare room to a lodger for £600 a month (£7,200 a year) and it's tax-free, as it's under £7,500.

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

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

Rent to buyUK

Renting a home below the normal rent for a few years to save a deposit to buy it.

In plain English:You rent a home for below the normal rent for a few years, so you can save up a deposit and then buy it.

MoreLess about Rent to buy

The lower rent helps you save. You may need to buy within a set time.

For example: A couple rents a new flat at 80% of the market rent for five years, then buys it with their savings as deposit.

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

Rental yield

A year's rent compared with the property's value.

In plain English:A year's rent divided by what the property is worth. It shows how much income a rental home brings in for its price.

MoreLess about Rental yield

Yields differ a lot by area. High yields can mean more risk.

For example: £12,000 of rent a year on a £240,000 flat is a 5% yield.

Renters' Rights ActApplies in EnglandEngland

A law in England that ends no-fault evictions and changes how renting works.

In plain English:A law in England that stops landlords evicting tenants without a reason, ends fixed-term tenancies and changes how rent rises work.

MoreLess about Renters' Rights Act

It ends Section 21 no-fault evictions.

It brings in a landlord database and ombudsman. Changes are coming in stages.

For example: Once in force, a tenant can only have their rent raised once a year and can't be evicted without a reason.

Article inside Foliopeak: The Renters' Rights Act for Landlords

Repossession

A lender taking back a home when the mortgage isn't being paid.

In plain English:If you stop paying your mortgage, the lender can go to court to take your home and sell it to get back what you owe.

MoreLess about Repossession

Lenders must try other options first, like payment plans. Free debt advice can help stop it.

For example: Someone falls behind on their mortgage, gets debt advice and agrees a plan with the lender, avoiding repossession.

Reserve currency

A currency central banks worldwide keep large amounts of, mainly the US dollar.

In plain English:A currency that central banks around the world hold a lot of, because it's trusted and widely used. The US dollar is the main one.

MoreLess about Reserve currency

The euro, yen and pound are smaller reserve currencies. Being one lets a country borrow more cheaply.

For example: Countries keep large amounts of US dollars because so much world trade, including oil, is priced in them.

See also: Exchange rate

Residence nil-rate bandUK

Extra Inheritance Tax-free allowance when your home goes to your children or grandchildren.

In plain English:An extra Inheritance Tax-free allowance when you leave your home to your children or grandchildren. It shrinks for very large estates.

MoreLess about Residence nil-rate band

It's up to £175,000, and shrinks by £1 for every £2 an estate is over £2,000,000.

Any unused can pass to a surviving partner. It must be a home the person lived in.

For example: Leave your home to your children and you can pass on up to £500,000 tax-free: £325,000 plus £175,000.

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

Article inside Foliopeak: Inheritance Tax Basics

Residuary estate

What's left of an estate after debts and specific gifts.

In plain English:What's left of someone's estate once debts, funeral costs and specific gifts in the will have been paid.

MoreLess about Residuary estate

It's often the largest part of an estate. Without clear wording, intestacy rules may apply to it.

For example: A will leaves £10,000 to a friend and the residuary estate to the children in equal shares.

Results day

The day a company publishes its half-year or full-year figures.

In plain English:Twice a year, a company on the stock market tells everyone how it's doing. If the news is better or worse than expected, the price can jump or drop.

MoreLess about Results day

UK companies report every six months, and many also give shorter trading updates in between. US companies report every three months, which is why people talk about earnings season.

What moves the price is how the figures compare with what investors expected, not whether they're good or bad on their own.

For example: A company's profit rises, but by less than analysts expected. Its shares fall on results day.

Results season

The weeks when many companies report their profits.

In plain English:A few weeks, several times a year, when lots of companies report their profits. Share prices can swing a lot.

MoreLess about Results season

In the US, banks often report first. Most UK companies report twice a year.

For example: During results season, a company's shares jump 8% after it reports higher profits than expected.

Retail and institutional investors

Everyday people investing their own money, and big organisations investing for others.

In plain English:Retail investors are everyday people investing their own money. Institutional investors are big organisations, like pension funds, investing for others.

MoreLess about Retail and institutional investors

Institutional investors often get better deals and more access. Retail investors are protected by more rules.

For example: A pension fund buys millions of shares in a company, while an everyday investor buys a few hundred.

Retained profit

Profit a company keeps instead of paying out.

In plain English:Profit a company keeps rather than paying out as dividends, to grow the business or save for later.

MoreLess about Retained profit

It's used to grow the business or keep a cushion. It appears on the balance sheet.

For example: A company makes £100,000 profit after tax, pays £40,000 in dividends and keeps £60,000 as retained profit.

Article inside Foliopeak: Retained Profit: The Money You Leave Inside the Company

Retirement interest-only mortgage (RIO)

An interest-only mortgage for older people, repaid when the home is sold.

In plain English:A mortgage for older people where you only pay the interest each month. The loan is paid off when the home is sold, usually after you die or move into care.

MoreLess about Retirement interest-only mortgage (RIO)

It's often called a RIO mortgage. Rates may be lower than equity release.

For example: A retired couple switches to a RIO mortgage, paying only interest each month, with the loan repaid when the house is sold.

Reverse charge (VAT)UK

A VAT rule where the business buying, not selling, pays the VAT to HMRC.

In plain English:For some services and building work, the business buying pays the VAT to HMRC instead of the seller, to stop VAT fraud.

MoreLess about Reverse charge (VAT)

It's meant to stop VAT fraud. Invoices must say reverse charge applies.

For example: A builder working for a contractor issues an invoice without VAT, and the contractor accounts for the VAT instead.

See also: Construction Industry Scheme (CIS)

Right to BuyApplies in EnglandEngland

Lets some council tenants buy their home at a discount.

In plain English:Some council and housing association tenants can buy their home at a discount. The rules differ across the UK, and it has ended in Scotland and Wales.

MoreLess about Right to Buy

Discounts depend on how long you've been a tenant. Selling soon after buying can mean paying some back.

For example: A council tenant of many years buys their home at a discount below its market value.

Rights issue

A company selling new shares to its existing shareholders to raise money.

In plain English:A company offers its current shareholders new shares, often at a discount, to raise money. If you don't buy, your share of the company shrinks.

MoreLess about Rights issue

You can sell your rights instead of buying. Rights issues are often a sign the company needs money.

For example: A company offers one new share for every four held at a discount. Someone with 400 shares can buy 100 more.

Ring-fencing (banks)UK

UK rules keeping big banks' everyday banking apart from their riskier investment banking.

In plain English:Big banks have to keep the part that holds people's accounts separate from the part that trades in markets, so a loss in one can't sink the other.

MoreLess about Ring-fencing (banks)

It came from a review after the 2008 crisis. Only banks holding a large amount of UK deposits have to do it.

For example: A big UK bank holds its customers' current accounts in one company and its trading business in another, each with its own money and board.

Article inside Foliopeak: Systemic Risk

Risk and return

The rule that higher possible returns come with higher risk.

In plain English:The chance of bigger gains comes with the chance of bigger losses. Safer investments usually pay less.

MoreLess about Risk and return

Cash is low risk and low return. Shares are higher risk, with higher returns over long periods.

How much risk suits you depends on how long you're investing and how you'd feel about a fall.

For example: Over 20 years, shares have usually beaten cash, but in some single years they've fallen by a third.

Robo-adviser

An online service that builds and runs a portfolio for you.

In plain English:An app or website that asks about your goals and attitude to risk, then picks and manages a mix of funds for you, for a fee.

MoreLess about Robo-adviser

Most use low-cost index funds. They don't usually give full financial advice.

You can usually change your risk level in the app.

For example: Someone answers questions in an app about their goals and risk, and it puts their ISA into a mix of index funds.

Article inside Foliopeak: Robo-Advisors and Ready-Made Portfolios

ROI, ROE and ROCE

Three ways of measuring how much a company or investment earns for the money put in.

In plain English:Three ways to see how well money is being used: return on investment, return on what shareholders put in, and return on all the money the business uses.

MoreLess about ROI, ROE and ROCE

ROCE is useful for comparing companies that borrow different amounts. ROE can look high if a company borrows a lot.

For example: A business uses £1 million of capital and makes £150,000 profit before interest and tax. Its ROCE is 15%.

Rollover reliefUK

Lets a business put off tax on a gain if it reinvests the money.

In plain English:If a business sells something at a profit and uses the money to buy a replacement, it can put off paying Capital Gains Tax.

MoreLess about Rollover relief

The new asset must be bought within one year before or three years after the sale. The gain reduces the cost of the new asset.

For example: A farmer sells a barn at a gain and uses the money to buy new land, putting off the Capital Gains Tax.

Romance scam

A fraud where someone builds an online relationship, then asks for money.

In plain English:A scammer builds a fake relationship online, often over months, then asks for money for an emergency. Never send money to someone you haven't met.

MoreLess about Romance scam

Scammers often claim to be abroad, in the army or working on oil rigs. They may avoid video calls.

Banks are seeing more of these, and losses can be huge.

For example: Someone meets a person online who, after months of messages, asks for money for a medical emergency. It's a scam.

Article inside Foliopeak: Spotting an Investment Scam

RSUs (restricted stock units)

Shares your employer promises you, which become yours after a set time.

In plain English:Shares your employer promises to give you after you've worked there for a set time. You pay income tax on them when they become yours.

MoreLess about RSUs (restricted stock units)

RSU stands for restricted stock unit. Selling straight away avoids risk of the shares falling.

When you later sell, any rise since vesting may be taxed as a capital gain.

For example: Someone's RSUs vest when the shares are worth £10,000. That amount is taxed as income through their pay.

Article inside Foliopeak: RSUs and Share Options: EMI, CSOP and Unapproved

RTI (Real Time Information)UK

Employers reporting pay to HMRC every time they pay staff.

In plain English:Every time your employer pays you, they tell HMRC how much you earned and what tax was taken, so your records stay up to date.

MoreLess about RTI (Real Time Information)

RTI stands for Real Time Information. It helps HMRC keep tax codes and Universal Credit up to date.

For example: An employer's payroll software sends details to HMRC every time staff are paid.

Rug pull

A crypto scam where a project's makers take the money and disappear.

In plain English:The people behind a crypto project suddenly take all the money investors put in and vanish, leaving the coin worthless.

MoreLess about Rug pull

Warning signs include anonymous teams and locked or unclear coin supplies. Many happen on decentralised exchanges.

For example: A team launches a new coin, raises money, then empties the pool and vanishes.

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

Rule of 72

A quick way to estimate how long money takes to double.

In plain English:Divide seventy-two by your yearly growth rate to get roughly how many years it takes your money to double.

MoreLess about Rule of 72

It works best for returns between about 4% and 12%. It also shows how fast inflation halves money's value.

For example: At 6% a year, money doubles in about 12 years, because 72 divided by 6 is 12.

Game: Compound

Russell 2000

An index of smaller US companies.

In plain English:A list of about two thousand smaller American companies, used to show how small US companies are doing.

MoreLess about Russell 2000

It has about 2,000 companies.

Small companies can grow fast but are riskier. They often do well when the US economy is strong.

For example: When interest rates fall, the Russell 2000 often rises faster than the S&P 500.

See also: Small, mid and large cap