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UK Banking Glossary

Plain English definitions for bank switching, stoozing, and personal finance terms. Each term has its own page with a full explanation.

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A

AER (Annual Equivalent Rate)
The interest rate you'd earn over a full year, accounting for compounding. It's the standard way UK banks express savings rates so you can compare like for like. A regular saver advertising 7% AER doesn't mean you earn 7% on all your deposits — because your balance builds monthly, the effective return is roughly half. Full definition →

B

Balance Transfer
Moving an existing credit card balance to a new card, usually one offering 0% interest for a set period. Balance transfers typically incur a fee of 1-3% of the amount transferred. This is different from a 0% purchase card, which gives you interest-free spending on new purchases. Full definition →
Banking Group
A parent company that owns multiple bank brands. For example, Lloyds Banking Group owns Lloyds, Halifax, and Bank of Scotland. For switch bonus purposes, banks in the same group are treated as the same bank — you can't claim a bonus if you've recently held an account with any brand in the group. Full definition →
Burner Account
Slang for a basic current account opened purely to be switched away from for a bonus. You open it with one bank, then switch it to another to claim the bonus. The burner account itself doesn't need to be anything special — a free basic account is fine. Full definition →

C

CASS (Current Account Switch Service)
The UK's official bank switching service, run by Pay.UK. It guarantees a full current account switch within 7 working days. All your payments, direct debits, and salary are automatically redirected. The old account is closed, and payments to it are forwarded for 3 years. CASS is free and covers you with a guarantee if anything goes wrong. Full definition →
Cooling-Off Period
The minimum time you must wait before switching back to a bank and claiming their bonus again. Typically 12-36 months depending on the bank. StoozeMax tracks these automatically and alerts you when you're eligible for a new switch. Full definition →
Credit Check (Hard vs Soft)
A hard credit check (visible to other lenders) happens when you apply for credit products like cards, loans, or current accounts with overdrafts. A soft check (visible only to you) is used for eligibility checks and identity verification. Hard checks may temporarily lower your credit score by a few points; soft checks have no impact. Full definition →

D

Direct Debit
An instruction to your bank that allows a company to collect payments from your account. Most switch bonuses require 2-3 active Direct Debits. You can set up cheap ones (from 30p/month) using services like 30p.co.uk specifically to meet these requirements. Full definition →
Donor Account
The existing current account you switch away from when claiming a bonus. Also known as a sacrificial or burner account. It's the account that gets closed during the CASS switch process. Most people keep a separate donor account that they don't use for everyday banking. Full definition →

F

FSCS (Financial Services Compensation Scheme)
UK government-backed protection that covers up to £120,000 per person per banking institution if a bank fails. This means your savings (including stoozing deposits) are protected. Note that FSCS limits apply per banking group, not per brand — so £120,000 across all Lloyds Group brands combined. Full definition →

I

ISA (Individual Savings Account)
A tax-free savings wrapper. You can save up to £20,000 per tax year in ISAs, and any interest earned is completely tax-free — it doesn't count towards your Personal Savings Allowance. Cash ISAs currently offer rates competitive with normal savings accounts. Full definition →

M

Minimum Payment
The smallest amount you must pay on your credit card each month to avoid penalties. When stoozing, always set up a Direct Debit for at least the minimum payment. Missing it can void your 0% deal and revert the balance to the standard APR of 23-25%. Full definition →

N

NS&I Premium Bonds
Government-backed bonds from National Savings & Investments where instead of earning interest, your money is entered into a monthly prize draw. The current prize fund rate is around 4.4%. Returns are tax-free, making Premium Bonds particularly attractive for higher-rate taxpayers who've used their PSA. Full definition →

P

PSA (Personal Savings Allowance)
The amount of savings interest you can earn tax-free each year. Basic-rate taxpayers get £1,000, higher-rate taxpayers get £500, and additional-rate taxpayers get £0. Interest above your PSA is taxed at your marginal income tax rate. ISA interest doesn't count towards your PSA. Full definition →

R

Regular Saver
A savings account requiring fixed monthly deposits (typically £25-300) for 12 months, offering a higher interest rate than standard savings accounts — often 6-8% AER. The effective return is roughly half the headline rate because your balance builds gradually. Most require you to hold a current account with the same bank. Full definition →

S

Sister Banks
Different bank brands owned by the same parent company. Key UK groups: Lloyds/Halifax/Bank of Scotland (Lloyds Banking Group), NatWest/Royal Bank of Scotland/Ulster Bank (NatWest Group), HSBC/First Direct (HSBC Group). Switching between sister banks usually doesn't qualify for a bonus. Full definition →
Standing Order
A regular payment instruction you set up with your bank to send a fixed amount to another account. Unlike Direct Debits (which are pulled by the recipient), standing orders are pushed by you. Some switch bonuses accept standing orders as qualifying activity alongside Direct Debits. Full definition →
Stoozing
A UK personal finance strategy where you spend on a 0% interest credit card instead of your debit card, keeping the cash in a savings account to earn interest. Before the 0% period ends, you pay off the card and keep the profit. The term originated on the MoneySavingExpert forum. Full definition →

T

Trading Allowance
A £1,000 annual tax-free allowance for miscellaneous income, which includes bank switch bonuses. If your total switch bonuses are under £1,000 in a tax year, you pay no tax on them. This is separate from your Personal Savings Allowance. Full definition →

U

Utilisation Rate
The percentage of your available credit that you're currently using. For example, if you have a £5,000 credit limit and a £2,500 balance, your utilisation is 50%. Keeping utilisation below 30% is generally good for your credit score. When stoozing, high utilisation on one card is normal but may temporarily affect your score. Full definition →