We reveal our guide to the financial jargon minefield to make you a savvy saver — plus, get a free fiver from our rewards club

DO you know your AER from your APR? If not, we can help.

Financial jargon confuses 82 per cent of us — with more than half “too embarrassed” to ask for a simple explanation.

As a result, one in five admits it has hit their ability to budget and save money.

Spokesman Tim Anson, from lender Satsuma, which conducted the study, said: “This suggests an alarming number of people might be making important financial choices without having a clear understanding of the key facts.

“As a lender, the idea of customers feeling too embarrassed to ask for a straightforward explanation is a huge concern.”

Here we pick out ten confusing financial acronyms and terms and give simple explanations:

1. APR: The annual percentage rate of charge states the interest rate for a whole year, rather than a monthly fee/rate, as applied on a mortgage, loan, credit card, etc.
2. AER: The annual equivalent rate designed to make savings accounts easier to compare. It assumes you keep your money in a particular account for a year.
3. IFA: An independent financial adviser is a professional who offers independent financial advice to their clients. They tend to recommend suitable financial products chosen from the whole of the market, not just a single lender.
4. ISA: An individual savings account is a tax-free way to save or invest. If you are thinking about putting aside money for the future, ISAs could be a good start.
5. Bank of England base rate:  The official interest rate set by the Bank of England’s Monetary Policy Committee. Banks and building societies use this to calculate interest rates for some of their financial products, such as mortgages or loans. If the base rate changes, your monthly payments may be affected if you are on a tracker or variable interest rate.
6. Balance transfer: If you owe money on a credit card which is charging you interest, you can pay off the debt using a card which offers a lower, or zero-per-cent interest. This is called a balance transfer. The money you owe does not disappear, it is just moved to a provider that will charge you less for having it.
7. Fixed rate: Usually applied to borrowing where the interest rate does not fluctuate during the fixed-rate period of the loan. This allows the borrower to accurately predict their future payments.
8. Annuity: A type of insurance policy that provides a regular income in exchange for a lump sum. At retirement you have to convert the capital (money) built up in your personal pension policy into a regular pension.
9. CGT: Capital gains tax is charged on the gain or profit you make when you sell, transfer assets or otherwise dispose of something. It applies to assets that you own, such as shares or property.
10. FCA: The Financial Conduct Authority is a regulatory body in the UK, but operates independently of the Government. It is in place to protect consumers, ensure market integrity and promote competition.

Fancy a free fiver?

YOU can get FREE cash with super Sun Savers just for buying your favourite paper.

Our brilliant new rewards club, which launched this week, will pay back our most loyal readers.