Personal Finances Alphabet N-Z Image 1

Personal Finance Terms Alphabet N To Z

In this blog we are continuing our look through the personal finance terms alphabet covering N to Z.

National Insurance

If you’ve recently applied for something from the state or have filled in another important document, you may have had to show your national insurance number. This is an identifier that relates to your pension scheme as well as other state benefit schemes

It’s also used by banks when you open an ISA (individual savings account), and for the electoral register to confirm your identity when you register to vote. Registering to vote is also important if you wish to keep a good credit rating, so keeping your national insurance number card handy is very important.


When we become too old to work we still need money to live on through our retirement. This pot of money that we save up as we work is known as our pension. There are three main types of pension, all based on the type of work a person has done.

The state pension is paid by the government and entitlement to it is built through National Insurance contributions which are usually taken from wages/salary as you work. In 2016 a flat rate pension of around £160 was introduced – but those who have built it up may be entitled to more. To qualify for the full state pension you need to have 35 years of national insurance record under your belt.

The defined benefit pension is given to those who work in the public sector or for large companies, which is based on salary and increases every year

The last type is the defined contribution pension, which builds based on the charges you pay, how well your investment into the pot performs, and how much you and your employer pay into the scheme.

Qualifications in Personal Finance

There are a few qualifications out there that help you become better at personal finance – the ones dedicated to general personal finance are usually at an easily achievable level for the novice or mature student alike, and are short courses designed to equip the student for further financial encounters in their life.

Look for these types of courses at your local university or college prospectus for more information – adding a certificate in personal finance to your CV can both help you at home and help employers choose you for jobs.


At the end of our lives we all deserve a rest from the stress of work – to retire and live off a pension, and use our time in order to be happy and spend our latter years with our families. As general a rule, the state asks us to retire at age 66, although this is subject to change. Until recently the actual age of retirement depends on your date of birth and whether male or female.

In spite of there being a general age of retirement, many still choose to voluntarily retire after having worked for a long time or having made a significant pension contribution. This is usually a move reserved for the most successful or wealthy people.

Savings Accounts

Opening a savings account can be the start of one’s journey to getting a mortgage, or buying a new home, or simply having a nest egg to spend on something useful later in life. Banks offer many types of savings accounts, and in some cases these will provide a rate of interest good enough for large sums of money to make more money just by being in there.

If you’re thinking of opening a savings account, the most reliable advice you can get is from your bank when they offer you various different types of account. As a general rule make sure to ask as many questions you can when you go in to open one, and make sure to let them know what type of payments you will be making into it – i.e. whether they will be monthly portions of your wage or lump sums from other sources.

Tax Return

If you’re self-employed or make a large sum of money, your yearly tax return is a very important thing to complete at the required time each year. Taxes are used by the state to make sure that publicly funded services can operate in the best possible way, funding roads, hospitals, schools, social services, etc. and a whole host of other operations which are beneficial to everyone around the country.

Submitting your completed tax return is fairly easy – it can be done online and the required forms are all served electronically. You should have your online banking at hand to work out your income by reading a yearly statement.

You need to do your tax return promptly because if you don’t do it there can be penalties, especially if your income is high enough to need to pay income tax. If it’s not high enough you should still send one in anyway, because this shows willingness and builds you a record.

Utility Bills

A utility is a function of the home, something which makes the home a reliable place in which you can be safe, warm, hydrated and happy. As such, managing your utility bills is key for your well-being and they should be a significant factor in your monthly budget.

There are a lot of different ways companies record your energy and water usage – mostly by a meter which needs to be read. Fortunately the internet comes around as a bit of a saviour these days, as electricity, water and internet bills can be paid online and are fairly easy to view for purposes of your budget.

It’s obviously important to pay bills promptly – In some cases late bills may impact your credit rating and make it harder for you later on.

Variable Rate Mortgages

This type of mortgage is the most subject to fluctuations in the economy – the rate at which you pay interest on your mortgage can be changed in terms of what the markets are doing, and what the national rate of inflation is.

This means your mortgage may end up costing more, or less, as the world economy changes – for example with the recent announcement of an interest rate hike, those with these type of mortgages will pay more.

However these mortgages often have lower initial payments and become increasingly popular as house prices surge and buyers are priced out of the market. It may be quicker and easier to qualify for one of these mortgages, and the payments can be more affordable. All mortgage applications are subject to a detailed assessment by the mortgage provider so all applicants are advised to read as much of the advice as possible provided by the mortgage providers.

Where To Get Help

Getting financial assistance can be a difficult task, but thankfully non-profit organisations exist to help you in times of difficulty or when your debts are piling up. In the UK the most helpful non-profit website for free, reliable financial advice is the government-led Money Advice Service. They also have a page which shows other non-profit organisations too.

For in person free advice on your finances, another place to go is the Citizens Advice Bureau, which offers help with various difficulties the average person might come across. They have local branches which you can visit for help.

XLS Spreadsheets

The spreadsheet is the ultimate tool in your amateur personal finance endeavours. It’s flexible, lets you calculate on the go, provides the framework for basic accounting, and lets you plan and update on the fly. In fact, more complicated accountancy tools are based in part on this model.

The best thing you can do to get familiar with spreadsheets is to take a short course, but fortunately for those of us who have used computers all our lives, we’re pre-armed with the skills we need to make use of them. When you do your home budgeting; a spreadsheet is the only way to go.


Personal Finances Alphabet N-Z Image 2Personal finance is about you, and your well-being. Putting yourself and those you care about in the centre of your personal finances ensures that you maintain your lifestyle and keep everyone happy. As a rule, you shouldn’t make any decisions with your finances that don’t directly benefit you and these people, and you should make a mental check before you potentially do.

The reason this reminder is important and that we’ve included it is to help you remind yourself whether handing over money or signing any document is beneficial to the people that matter. From a monetary, and philosophical, point of view, your self-preservation revolves around making the right decisions – not jeopardizing your position, and staying happy.

Zero-based Budgeting

This is a very labour-intensive technique (and one that conveniently begins with z) that allows the budgeter to bring all their finances back to zero at the end of the month. It means that a bank balance will pay for everything down to the last penny, and a wage contributes exactly as much as you need it to.

This form of budgeting is on the more extreme end of scrimping and saving, but we’ve included it as more of an example from which to learn – you can learn a lot from the devotees of this uncommon method, and forums and web help for this technique are an excellent learning resource if you apply some of the principles to more traditional budgets. It’s a complicated discipline, yet nonetheless provides a few really simple ideas if you have the time to read up on it.

The personal finance industry is large and so is the number of terms used within it. We hope this little guide helps you understand the world of personal finance a little better.