United Kingdom personal finance glossary

Additional Rate

The top UK income-tax rate of 45%, charged on income above £125,140 in 2026 — the threshold sits at the point the personal allowance has fully tapered.

Auto-Enrolment

The UK workplace pension system requiring employers to enrol eligible workers into a pension scheme and pay an employer contribution alongside the employee's.

CGT Annual Exempt Amount

The slice of capital gains a UK individual can realise each tax year before Capital Gains Tax applies — £3,000 in 2026, down from £12,300 in 2022.

Higher Rate Threshold

The UK income level above which earnings are taxed at 40% — £50,270 in 2026 for England, Wales and Northern Ireland (Scotland uses a different band structure).

Individual Savings Account (ISA)

A UK tax-free savings or investment wrapper, with an annual subscription limit shared across cash, stocks & shares, innovative finance, and Lifetime ISA variants.

Lifetime ISA (LISA)

A UK tax-advantaged savings account for people aged 18–39, with a 25% government bonus on contributions up to £4,000 a year, ring-fenced for a first home or age-60+ withdrawal.

Marriage Allowance

A UK income-tax transfer that lets a spouse or civil partner earning under the personal allowance pass up to £1,260 of unused allowance to a basic-rate partner.

National Insurance (NI)

The UK social-insurance contribution funding state pension and welfare benefits, paid by employees, employers, and the self-employed in separate classes.

Pay As You Earn (PAYE)

The HMRC system for collecting income tax and National Insurance directly from wages — your employer deducts it before paying you.

Personal Allowance

The UK income-tax-free band — £12,570 in 2026 — applied before any income tax is charged, tapered to zero for incomes above £100,000.

Self-Assessment

HMRC's annual return for people whose income isn't fully settled through PAYE — the self-employed, landlords, high earners, and anyone with untaxed side income.

Self-Invested Personal Pension (SIPP)

A UK personal pension wrapper that gives the holder full control over the investments inside it, with HMRC tax relief on contributions.

Stamp Duty Land Tax (SDLT)

The UK tax on property purchases above the nil-rate threshold, charged on slices of the price at progressive band rates with first-time buyer and additional-property variations.

Student Loan Plan (Plan 1/2/4/5)

The repayment plan a UK graduate sits on — determined by when and where they studied — which sets the income threshold and rate at which student loan deductions are taken from pay.

Tax Code

The alphanumeric code HMRC issues each PAYE employee so the employer knows how much personal allowance to apply when calculating income tax.