By Scrimpr
Updated 18 Jan 2026
Savings and investing, but without the jargon.
The beginner-friendly guide to UK savings & investing
Savings and investing, but without the jargon.
Grow Money
Updated Jan 2026
By Scrimpr
Updated 18 Jan 2026 Most people only need to understand a handful of concepts to make good decisions with their money. This glossary helps you get there.
This resource was made to help you learn about the different types of accounts where you can save and invest, what you can put in them, what each of them cost, and what tax you'll pay. There's over 50 short articles explaining key money terms and concepts. All are explained in plain English and linked together. Start from whatever's confusing you and keep reading until you know enough.
Most finance sites explain jargon with more jargon. Scrimpr doesn't.
Growing your money in three steps
1
Save 0-5 years
Keep money safe for emergencies and short-term goals
2
Inflation the catch
Understand that cash loses value over time
3
Invest 5+ years
Grow the rest for long-term goals
Save first. Invest what you don't need for years.
Savings & Investing Simplified
Key concepts explained · Click any term to learn more
Not sure where to start? Try: ISA → Fund → Index Fund → OCF
The Basics
Compound Interest
When your gains earn more gains, so your money grows faster over time. Works for both saving and investing.
Inflation
When prices rise over time, making your money worth less. The main reason people invest.
Interest
Money a bank pays you for keeping your savings with them. It helps your money grow, but there's a catch.
Investing
Putting your money into things that can grow in value over time, like shares in companies.
Saving
Putting money aside for later, usually in a bank account where it earns interest.
Stock Market
The system where anyone can buy and sell ownership in companies. Also the name for places like the London Stock Exchange where this happens.
Savings Accounts
Cash ISA
A savings account where you'll never pay tax on the interest you earn.
Easy Access Savings
A savings account that lets you take your money out whenever you want, with no penalties.
Fixed Rate Savings
A savings account where the interest rate is guaranteed for a set period, but you can't touch your money.
Notice Account
A savings account where you tell the bank before withdrawing. Usually 30 to 120 days' notice.
Premium Bonds
A government savings product where instead of interest, you're entered into a monthly prize draw. Tax-free, 100% safe, but no guaranteed return.
Regular Saver Account
A savings account that usually pays a high interest, but limits how much you can pay in each month.
Savings Concepts
AER (Annual Equivalent Rate)
The standard way to show yearly savings interest rates, so you can compare accounts fairly.
Emergency Fund
Money set aside for unexpected costs or income loss. Usually 3 to 6 months of expenses is recommended.
Fixed Rate
An interest rate that's guaranteed not to change for a set period.
Personal Savings Allowance
The amount of savings interest you can earn each year without paying tax.
Variable Rate
An interest rate that can go up or down at any time.
Investment Accounts
Flexible ISA
A Fkexible ISA is one that lets you withdraw and replace money in the same tax year without losing your allowance.
GIA (General Investment Account)
An investment account with no tax benefits—but no limits either.
ISA (Individual Savings Account)
A tax-free account for saving or investing.
ISA Allowance
The maximum you can put into tax-free accounts each year. Currently £20,000.
JISA (Junior ISA)
A tax-free savings or investment account for under-18s. The child can't touch it until they turn 18.
LISA (Lifetime ISA)
An ISA for buying your first home or retirement, with a 25% government bonus.
SIPP (Self-Invested Personal Pension)
A pension you control yourself, with more investment choice than a workplace pension.
Stocks and Shares ISA
A tax-free account for investing in funds, shares, and bonds.
What You Can Buy
Accumulation Fund
A fund that automatically reinvests any income it earns. Your holding grows instead of cash landing in your account.
Bond
A loan to a company or government that pays you interest. Lower risk than shares, but usually lower returns too.
Distributing Fund
An ETF that pays dividends out as cash. Same as an income fund, just different label.
Equity
Another word for shares. You'll see it in terms like "equity fund" which means a fund that holds shares.
ETF (Exchange-Traded Fund)
A fund that trades on the stock exchange. One purchase can give you a share in hundreds of companies.
Fractional Shares
A way to buy part of a share when you can't afford a whole one. Useful for expensive shares or investing small amounts.
Fund
A way to invest in many companies at once, without buying them one by one. One purchase, hundreds of investments.
Gilts
Bonds issued by the UK government. Very low risk because the government has never failed to pay them back.
Income Fund
A fund that pays you cash regularly instead of reinvesting it. Used by people who need income from their investments.
Index Fund
A fund that tracks a list of companies, like the FTSE 100. Low fees because no one is picking stocks.
Investment Trust
A company that invests in other companies. Traded on the stock exchange like a share.
Multi-asset Fund
A fund that holds a mix of shares and bonds in one package. One purchase, a complete portfolio.
OEIC (Open-Ended Investment Company)
The most common type of fund in the UK. One price per day, easy to set up for monthly investing.
Shares
A small piece of ownership in a company. When the company does well, your share becomes worth more.
Tracker Fund
Another name for an index fund. A fund that automatically follows a list of companies.
Fees
Custody Fee
A fee some platforms charge for holding your investments safely. Often bundled into the platform fee.
FX Fee (foreign exchange fee)
A charge for converting your pounds into another currency when buying foreign investments.
Inactivity Fee
A charge some platforms apply if you don't trade for a while. Many platforms don't charge this.
OCF (Ongoing Charges Figure)
The yearly fee a fund charges. Shown as a percentage and taken automatically from your investment.
Platform Fee
A fee the company holding your investments charges you. Usually yearly, sometimes monthly.
Spread
The gap between what you pay to buy and what you'd get if you sold immediately. A hidden cost.
TER (Total Expense Ratio)
An older name for the yearly fee on a fund. Now usually called OCF.
Trading Fee
A fee you pay each time you buy or sell an investment. Some platforms charge nothing.
Tax
Bed and ISA
Selling investments outside an ISA and rebuying them inside one. Shelters future gains from tax.
Capital Gains Tax
Tax you pay on profits when you sell an investment for more than you paid. ISAs are exempt.
Dividend Allowance
The amount of dividend income you can receive each year without paying tax. Currently £500.
Dividend Tax
Tax on cash payments you receive from your investments. ISAs are exempt.
Stamp Duty
A 0.5% tax when buying UK shares. Funds and ETFs are exempt.
Tax Relief
When the government tops up your pension contributions by refunding some of the tax you paid.
Investing Concepts
Dividend
A cash payment a company makes to people who own its shares. A share of the profits.
Market Index
A list of companies used to measure how a market is performing. The FTSE 100 and S&P 500 are examples.
Portfolio
All of your investments taken together. The full picture of what you own.
Regular Investing
Investing a fixed amount automatically each month. Often cheaper than manual trades.
Return
The profit or loss on an investment, usually shown as a percentage.
Risk
The chance that your investment loses value. Higher risk can mean higher returns, but also bigger losses.
Volatility
How much an investment's value moves up and down. A bumpy ride, even if it ends well.
Who Does What
Broker
A company that lets you buy and sell investments. Same as an investment platform.
FCA (Financial Conduct Authority)
The UK regulator that makes sure banks, platforms, and other financial firms treat you fairly.
FSCS (Financial Services Compensation Scheme)
Protection that covers up to £120,000 of your money if a UK financial firm goes bust. The protection limit is £120,000 for UK banks/building societies, and £85,000 for investing firms.
Fund Provider
A company that creates and manages funds you can buy into. Vanguard, BlackRock, and Fidelity are examples.
In Specie Transfer
Moving your actual investments to a new provider, instead of selling them first.
Investment Platform
A company that holds your investments and lets you buy and sell. Also called a broker.
Nominee Account
How platforms hold your investments. In their name, but on your behalf.
Securities Lending
How platforms hold your investments. In their name, but on your behalf.
Transfer
Moving your ISA, pension, or investments from one provider to another. Keep your tax benefits.
Pensions
Annual Allowance
The maximum you can pay into pensions each year while still getting tax relief. Currently the annual allowance is £60,000.
Annuity
Using your pension pot to buy a guaranteed income for the rest of your life.
Auto-enrolment
When your employer automatically puts you into a workplace pension. You can opt out, but you'd lose free money.
Crystallise
The term for when you start accessing your pension - taking your tax-free cash or setting up an income.
Defined Benefit Pension
A pension that promises a guaranteed income in retirement, usually based on your salary and years worked.
Defined Contribution Pension
A pension where you build up a pot that depends on how much goes in and how well it's invested.
Drawdown
Taking money from your pension while the rest stays invested. You control how much and when.
Pension
A way to save for retirement with tax benefits. The government tops up what you put in.
Pension Age
The age you can start taking money from your pension. Currently the age is 55 for private pensions, 66 for the State Pension. But these are rising by one year in 2028.
Pension Contributions
Money you or your employer pay into a pension. The government adds tax relief on top.
Personal Pension
A pension you set up yourself, separate from any workplace scheme.
Safe Withdrawal Rate
How much you can take from your pension each year without running out. The value often quoted is 4%.
State Pension
A regular payment from the government when you reach pension age, based on your National Insurance record.
Tax-free Lump Sum
The 25% of your pension you can take as cash without paying any tax.
UFPLS (Uncrystallised Funds Pension Lump Sum)
Taking lump sums directly from your pension - 25% tax-free, 75% taxed as income.
Workplace Pension
A pension set up by your employer. They pay in too, so it's free money on top of your salary.
