Frequently asked questions.
- iLrnr GlossaryA glossary of terms used for the site. Not technically FAQs but will be utilised in specific pages.
- Cost of living
How much it costs you to pay for essential basic spending like food, accommodation, travel, taxes, healthcare and other similar items. Measuring the cost of living allows comparisons to be made about how expensive one place is versus another.
Means that average prices are rising, but the purchasing power of money is declining, and it leads to an increase in the cost of living.
- Money Supply
This simply means the total amount of money in the economy at any time in all its different forms.
- Central Bank
The bank that manages a national currency, sets interest rates, manages the money supply and holds reserves of money under its control.
A company is a business that trades as a legal entity and is regulated by Companies House.
Annual Percentage Rate is the total cost of borrowing money for one year. It includes the rate of interest you will pay, as well as any fees and other charges, including the arrangement fee.
- Bank of England
The Bank of England is the UK’s central bank. That means it issues bank notes, is banker to the government, sets the base rate of interest and regulates the whole UK banking system.
- Base rate of interest
The official rate of interest set by the Bank of England: its purpose is to regulate inflation.
Is the chance you take that something might go wrong in one way or another.
Someone who has taken money in the form of a loan and has to pay it back.
Banks and other businesses that make loans to you, which they expect to be fully repaid, and on which interest is charged until full repayment is made.
Money you have left after paying for your financial commitments and other costs, which you set aside for future use.
Money that you have borrowed and must be paid back, usually with interest.
Something you can keep doing at its current rate for as long as required.
- Financial Commitments
These are the bills you have to pay to sustain yourself, like rent and food. These are the permanent costs we all face.
If something is unsustainable it simply means that you cannot keep doing it for long before we are forced to stop.
- Short term debt
A debt you should be able to pay off in full within one year.
The name for the loan to buy a house or property. Its usually over 25 years, you pay interest on the loan, and it is secured against the value of the house or property.
- Long Term Debt
A debt that will not be paid off within a year. A serious financial commitment that you should only take on when you are sure you need it and can afford it.
The word we use to describe anything to do with money including bills, savings, borrowing, lending, budgeting and investing. Each of those is a financial activity.
- Credit Card Companies
Credit card companies issue credit cards which allow you to make purchases without using cash. When you use a credit card you are borrowing money from the card company which must be paid back.
Banks are businesses that trade in money. They lend money with interest to borrowers, they accept deposits of money from savers and others, they provide a range of financial services for their customers.
Something we all use to pay for goods and services. If there was no money, we would have to barter with each other every time we wanted something, so money makes all our daily transactions possible because we all accept its value.
Banks and other businesses charge interest on money you borrow from them, and until you pay the money back in full, you will continue to pay interest. Once you pay off the debt, interest disappears because it can only exist where there is a debt.
Being in debt means that you owe money. Until you pay the whole debt back, you will remain in debt.