|A legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.
|A loan for a house, in which the bank or building society legally owns your house until the debt is cleared.
|Tax levied directly on personal income.
|Tax paid on your income. To see the current UK tax bands, click here.
|A tax levied on households by local authorities in Britain, based on the estimated value of a property and the number of people living in it.
|A tax you pay to your local council based on the value of your house and the number of residents living there.
|The system of compulsory payments by employees and employers to provide state assistance for people who are sick, unemployed, or retired.
|A deduction from your income that contributes to state benefits, such as the NHS. Unlike income tax, National Insurance is calculated weekly – so if your income increases one week but then decreases the following week, you can’t claim the difference. For more information on National Insurance bands, click here.
|A loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses.
|If you would like to read more about student loans, click here.
|Your P60 shows the tax you’ve paid on your salary in the tax year (6 April to 5 April). You get a separate P60 for each of your jobs.
|At the end of each tax year, you should be given a P60 by your employer. This breaks down how much tax and national insurance you have paid. Try not to confuse this with a P45, which is a similar kind of slip that you should receive when you leave an employer.
|Refers to the full payment an employee receives before tax deductions and mandatory contributions are removed. This amount is equal to your base salary plus all benefits and allowances, such as special allowances, overtime pay, medical insurance, travel allowance and housing allowance.
|Your income before your tax, national insurance, and other mandatory contributions have been deducted.
|Net pay is the amount of pay left in your payslip, after tax deductions and other mandatory contributions have been removed.
|Your income after your tax, national insurance and other mandatory contributions have been made. This does not include your personal financial commitments, such as rent or bills.
|Disposable income is the amount of money that households have available for spending and saving after direct taxes (such as Income Tax, National Insurance and Council Tax) have been accounted for. It includes earnings from employment, private pensions and investments as well as cash benefits provided by the state.
|Disposable income is the money you have after your mandatory contributions (such as tax and national insurance) but before you have paid your personal living expenses (such as rent, bills, car insurance, etc).
|Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current bills. It is the total personal income after subtracting taxes and minimal survival expenses (such as food, medicine, rent or mortgage, utilities, insurance, transportation, property maintenance, child support, etc.).
|Although often referred to as disposable income, discretionary income is your income after all mandatory contributions (such as your income tax and national insurance) and personal living expenses (such as rent and bills) have been paid. Your discretionary income is the money you have left to save, invest, or treat yourself with!
|An individual savings account: a scheme allowing individuals to hold cash, shares, and unit trusts free of tax on dividends, interest, and capital gains.
|A type of savings account that is free from tax. However, you are limited to how much you can pay in. Many ISAs come with a variety of benefits – such as help to buy ISAs or Lifetime ISAs providing a government contribution when you buy your first home.