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Lingo bingo

Understanding the terms and phrases connected to finances can be tricky and feel overwhelming, especially as there is so much jargon! Let's help you bust some of that lingo...

Lingo bingo

Understanding money lingo: financial terms explained

It can be hard getting your head around the words and phrases connected to money when there is so much complex lingo and confusing jargon. However, having a good understanding of what these terms mean and getting to grips with financial definitions will empower you to make better financial decisions and feel more informed in the future.

From inflation to APR, budget planning to credit scores – financial terms can feel as overwhelming as the prospect of having to pay your bills each month. As part of our Words that Count financial resilience campaign, we thought we'd help to demystify the financial lingo that makes your head hurt.

Poku Banks brings Lingo Bingo to the streets of London for Words that Count

Watch what happened when TikTok influencer Poku Banks went out on the streets of London to find out whether the people he met were able to define some of these familiar but mind-boggling financial terms in our fun game of Lingo Bingo.

Would you have the answers if you took on a game of Lingo Bingo? Get a head start and read our glossary of financial terms, words and phrases below to help unpick their meaning. You might already know some of the lingo or maybe these are completely new financial definitions to you. Once you've had a read, test your knowledge in our quiz.

Watch the full series of Lingo Bingo with Poku Banks on our YouTube Words that Count playlist here.

You'll find handy glossaries of tricky financial terms and phrases on all our Words that Count pages so make sure to read through to discover the definitions of other words and jargon like direct debit, tenancy agreement and energy tariffs.

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Glossary of financial terms

Let's have a look at the financial lingo that might have you scratching your head and find out their definitions:

What does APR mean?

APR is short for Annual percentage rate which is the amount of interest that builds up over a year captured in percentage form.


Bacs stands for 'bankers' automated clearing system.' It refers to the network of banks and building societies that participate in the Bacs payments scheme - the standard electronic payment type which allows you to transfer money easily from one bank account to another.

Disposable income

Disposable income is the amount of money you have left to spend (or save!) in whatever way you choose after all the various compulsory taxes and social security charges have been taken from your salary.

Fixed and variable

A fixed rate loan has the same interest rate for the entirety of the borrowing period, while variable rate loans have an interest rate that changes over time. Borrowers who prefer predictable payments which they can budget for each month generally go for fixed rate loans, which won't change in cost.

Gross and net

Gross refers to the whole of something, while net refers to a part of a whole following some sort of deduction. For example, net income for a business is the income made after all expenses, overheads, taxes, and interest payments are deducted from the gross income.

What is inflation?

Inflation is a general increase in the price of goods (like your food shop) and services (like your haircut) in an economy. This corresponds to a reduction in the purchasing power of your money, which basically means your £1, fiver or tenner will not go as far as it did previously and unfortunately, you can't buy as many things or pay for as many services with the same amount of money.

Interest rate

An interest rate is the proportion of the amount lent, deposited, or borrowed on top of the sum amount, which is paid back over a stretch of agreed time. The total interest on an amount lent or borrowed depends on a number of factors including the sum, interest rate, frequency, and length of time.


PAYE stands for 'pay as you earn.' This is the system your employer or pension provider uses to take income tax and national insurance contributions before they pay your wages or pension.

Your tax code tells your employer how much to deduct. If you're interested in finding out more about understanding your payslip, you can read our article about Receiving your pay.

What is a recession?

In the simplest terms, a recession is a continuous decline in industrial and economic activity over a period of time, leading to less trade for that country. This often happens at the same time as unemployment rates get higher. For a country to be classed as 'in a recession', this drop in trading power and economic activity needs to take place over two consecutive business quarters, or put a different way - at least six months in a row.

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