Accessible cash
Money you can use without borrowing, selling an investment or waiting for a restriction to end.
Reference
Financial glossary
Plain-language definitions for the terms used across Money Considered. The same definitions are used in every calculator so that assumptions remain consistent.
Annual percentage rate (APR)
A standard annual measure of borrowing cost that includes interest and certain charges.
Appreciation
An increase in an asset’s value over time.
Assumption
A figure or condition used to calculate an illustration where the future value is unknown.
Balloon payment
A larger final payment due at the end of some finance agreements.
Cash flow
Money entering or leaving over a period of time.
Compound growth
Growth earned on both the original amount and earlier growth.
Contribution
Money added to savings, an investment or a pension.
Contribution charge
A fee deducted when new money is added to an investment.
Debt balance
The amount still owed to a lender.
Depreciation
A reduction in an asset’s value over time.
Effective annual return
The total annual rate of growth after compounding within the year.
Emergency cash
Accessible money set aside to meet unexpected costs or a disruption to income.
Essential spending
Regular spending the user chooses to treat as necessary within the calculation.
Fee drag
The difference fees make to a future value, including the growth those fees could have earned.
Financial scope
Whether the figures in a calculation describe one person or a whole household.
Fixed fee
A charge expressed as a cash amount rather than a percentage.
Future money
A cash amount stated in the pounds of a future date, without adjusting for inflation.
Inflation
A broad rise in prices that reduces what a given amount of money can buy.
Investment horizon
The length of time before invested money is expected to be needed.
Liquidity
How readily an asset can be turned into spendable cash without a material loss.
Loan-to-value (LTV)
A mortgage balance expressed as a percentage of the property’s value.
Minimum payment
The smallest contractual debt payment required for a period.
Net income
Income available after tax and other deductions.
Net wealth
The value of assets in a scenario after subtracting debts and relevant exit costs.
Nominal value
A money value that has not been adjusted for inflation.
Ongoing percentage fee
A recurring charge calculated as a percentage of an investment balance.
Opportunity cost
The value of the next-best use of money or time that is given up by a decision.
Priority arrears
Missed payments with potentially serious consequences, such as rent, mortgage, council tax or energy arrears.
Protected cash
Part of accessible cash deliberately excluded from a model because the user wants it left untouched.
Real value
A future amount converted into today’s purchasing power using an inflation assumption.
Resale value
The amount expected to be received when an asset is sold, after relevant selling costs.
Scenario
A set of assumptions used to explore one possible outcome rather than predict it.
Sensitivity
How much a result changes when one or more assumptions change.
Shortfall
The point at which available money is insufficient to meet the modelled cash flows.
Total return
Investment growth from price changes and reinvested income, before or after specified fees and tax.