Glossary — jargon buster

Also known as: automatic renewal, auto-renew

A contract term under which an agreement continues automatically for a further period — and you keep being billed — unless you cancel before a set date. It is the default on many subscriptions, insurance policies, and broadband or mobile plans.

See also: Fixed term, Notice period, Rolling contract

Also known as: minimum term, minimum contract period, contract term

A set length of time you agree to stay with a provider — commonly 12, 18, or 24 months. During the fixed term the provider may charge a fee if you leave early. When the fixed term ends, the contract often continues on a rolling basis or at a standard (out-of-contract) price.

See also: Early exit fee, Rolling contract, Out-of-contract price

Also known as: periodic contract, month-to-month, no fixed term

A contract with no fixed end date that continues from one billing period to the next — usually month to month — until either side ends it. Each period renews automatically until you give notice.

See also: Auto-renewal, Notice period, Fixed term

Also known as: notice to cancel, cancellation notice

The amount of advance warning a provider requires before a cancellation or change takes effect — for example, 30 days. Billing typically continues through the notice period, so the cancellation date and the date your payments stop can differ. Notice requirements are set out in the contract's terms.

See also: Auto-renewal, Cooling-off period, Early exit fee

Also known as: right to cancel, cancellation period, 14-day cooling-off

A window after signing up — frequently 14 days for contracts agreed online, by phone, or away from a trader’s premises — during which you may cancel under UK consumer law, often without giving a reason. The exact length and conditions depend on the type of product and how it was bought.

See also: Notice period, Free trial

Also known as: early termination charge, exit fee, cancellation fee

A charge some providers apply if you end a fixed-term contract before the agreed term is over. The amount and how it is calculated are defined in the contract — for example, a proportion of the remaining monthly payments.

See also: Fixed term, Notice period

Also known as: trial period, introductory trial

A period during which a service is provided at no charge. Many free trials convert into a paid, recurring subscription automatically when the trial ends unless you cancel beforehand, so the start of billing and the start of the trial can be different dates.

See also: Auto-renewal, Recurring payment, Introductory price

An instruction you give your bank that lets a provider collect varying amounts from your account on agreed dates. Payments are protected by the Direct Debit Guarantee, and you can cancel the instruction through your bank at any time.

See also: Standing order, Continuous payment authority, Recurring payment

An instruction you set up with your bank to pay a fixed amount to the same recipient on a regular schedule. Unlike a direct debit, you — not the recipient — control the amount and timing, and you can change or cancel it through your bank.

See also: Direct debit, Recurring payment

Also known as: CPA, recurring card payment

A recurring payment taken from your debit or credit card using your card details, common for subscriptions. It differs from a direct debit: it runs on the card networks rather than the direct debit scheme. You can ask the provider to stop it, and you can also tell your card issuer to cancel it.

See also: Direct debit, Recurring payment, App-store billing

Also known as: recurring billing, subscription payment

A payment that repeats automatically on a regular cycle — weekly, monthly, or yearly — until it is cancelled. Subscriptions, memberships, and many insurance policies are billed this way.

See also: Billing cycle, Continuous payment authority, Auto-renewal

Also known as: billing period, billing frequency

The interval between one regular charge and the next — for example monthly or annual. The billing cycle determines when a recurring payment is taken and what period each charge covers.

See also: Recurring payment, Pro rata

Also known as: in-app purchase, in-app subscription, store-billed subscription

A subscription bought and paid for through a mobile platform’s store (such as the Apple App Store or Google Play) rather than directly with the provider. The charge appears on a store receipt from the platform, and the subscription is usually managed in the store’s account settings rather than on the provider’s own site.

See also: Recurring payment, Continuous payment authority

Also known as: proportional charge, part-period charge

A charge or refund worked out in proportion to the part of a period it covers, rather than the whole period. For example, joining part-way through a month may produce a pro-rata charge for the remaining days only.

See also: Billing cycle

Also known as: promotional price, intro offer, welcome price

A reduced price that applies for a limited opening period — for example, a lower monthly rate for the first 6 or 12 months. When the introductory period ends the price usually changes to the standard rate set out in the contract.

See also: Out-of-contract price, Mid-contract price rise, Fixed term

Also known as: standard price, out-of-contract rate, default tariff

The price a provider charges once a fixed-term or promotional period has ended and you have not moved to a new deal. It is often higher than the in-contract price. The contract states what this rate is or how it is set.

See also: Fixed term, Introductory price, Tariff

Also known as: in-contract price increase, annual price increase

An increase to your price that takes effect during a contract term, where the contract allows it. Some agreements link the rise to an inflation index or a fixed percentage. The basis for any permitted increase is set out in the contract’s terms.

See also: Introductory price, Out-of-contract price

Also known as: rate plan, price plan

The specific pricing plan that applies to a service, setting out what you pay and what is included. Energy, mobile, and broadband providers each publish a range of tariffs with different prices and terms.

See also: Standing charge, Unit rate, Out-of-contract price

Also known as: APR, annual percentage rate

A standardised figure that expresses the yearly cost of borrowing as a percentage, including the interest rate and certain compulsory fees. Because it is calculated on a common basis, APR is intended to let the cost of different credit products be compared like for like. It is a descriptive measure of cost, not a recommendation.

See also: Representative APR, Interest rate, Fixed rate vs variable rate

Also known as: representative example

The APR that a lender expects at least 51% of accepted applicants to receive for an advertised credit product. The rate you are actually offered can be higher and depends on the lender’s assessment, so the representative APR is an advertising benchmark rather than a guaranteed personal rate.

See also: APR (Annual Percentage Rate), Interest rate

The percentage charged on money you borrow, or paid on money you save, over a period of time. On borrowing it is one part of the total cost of credit; the APR captures interest together with certain fees.

See also: APR (Annual Percentage Rate), Fixed rate vs variable rate

Also known as: fixed rate, variable rate

A fixed rate stays the same for a set period, so the payment does not change with market rates during that time. A variable rate can move up or down — for example, in line with a lender’s standard rate or a central benchmark — so payments may change. The contract states which applies and for how long.

See also: Interest rate, APR (Annual Percentage Rate)

Also known as: in arrears, missed payments

An amount that is overdue because one or more scheduled payments were not made by their due date. “In arrears” can also describe billing for a period that has already passed, as opposed to paying in advance.

See also: Direct debit

Also known as: insurance premium

The amount you pay an insurer for cover, either as a single payment or in instalments (often monthly). Paying monthly may include an interest charge, which the insurer must disclose. The premium is the price of the policy, separate from any excess you pay when you claim.

See also: Excess, Sum insured, No-claims discount

Also known as: policy excess, deductible

The amount you agree to pay towards a claim yourself, with the insurer covering the rest up to the policy limits. It is typically split into a compulsory excess set by the insurer and a voluntary excess you choose. The excess applies when you claim and is separate from the premium you pay for cover.

See also: Premium, Sum insured

Also known as: cover level, level of cover, coverage limit

The maximum amount an insurer will pay out under a policy, or for a particular type of claim. If the sum insured is set below the true value of what is covered, a claim may be reduced — sometimes called underinsurance. It is a stated figure in the policy, not advice on how much cover to hold.

See also: Premium, Excess

Also known as: no-claims bonus, NCD, NCB

A reduction applied to a renewal premium based on the number of consecutive years you have held a policy without making a claim. Making a claim, or certain claims, can reduce the discount. Some insurers offer to protect it for an additional charge. The discount is a factual feature of the policy.

See also: Premium, Auto-renewal

Also known as: SIM only, SIMO

A mobile plan that provides calls, texts, and data on a SIM card without a handset bundled into the price. SIM-only plans are often shorter-term or rolling, because there is no phone cost being repaid over a fixed period.

See also: Data allowance, Rolling contract, Bundle

Also known as: data cap, monthly data, data limit

The amount of mobile data included in a plan over a billing period, measured in gigabytes (GB). Using more than the allowance can lead to out-of-bundle charges or reduced speeds, depending on the plan’s terms.

See also: Out-of-bundle charge, SIM-only, Tariff

Also known as: out-of-bundle, overage charge, excess usage charge

A charge for usage beyond what a plan includes — for example, calls, texts, or data above the bundled allowance. The per-unit rates for out-of-bundle use are set out in the provider’s tariff.

See also: Data allowance, Bundle, Tariff

Also known as: package, bundled services

Two or more services sold together under one agreement and price — for example broadband, TV, and phone. A bundle may have a single contract end date and notice period covering all the included services.

See also: Out-of-bundle charge, Tariff, Fixed term

A fixed daily amount on an energy bill that you pay regardless of how much energy you use. It covers costs such as maintaining the network connection. It is charged in addition to the unit rate for the energy you consume.

See also: Unit rate, Tariff

Also known as: price per unit, price per kWh

The price you pay for each unit of energy used, usually measured per kilowatt-hour (kWh). Your usage-based energy cost is the unit rate multiplied by the amount used, on top of any standing charge.

See also: Standing charge, Tariff

Also known as: MSA, master services agreement, master agreement

An overarching contract that sets the general terms governing an ongoing relationship between two parties — such as liability, payment terms, and confidentiality — so that individual pieces of work can be agreed under shorter order forms or statements of work without renegotiating everything each time.

See also: SLA (Service Level Agreement)

Also known as: SLA, service level agreement

A part of a contract that defines the level of service a provider commits to — for example, uptime, response times, or support hours — and what happens if those levels are not met, such as service credits. It describes the agreed standard; it does not itself guarantee an outcome.

See also: MSA (Master Services Agreement)