So what do all those terms mean in the Budget? This A-Z guide might help with some of the phrases delivered by Alistair Darling.

A
Annual Equivalent Rate - what the interest rate would be if interest was paid and compounded each year.

B
Benefits In Kind - benefits, excluding salaries, given to employees. Examples are cars and car fuel, medical insurance and gifts. These are taxed as employment income.

C
Car scrappage scheme - an initiative, used in other EU countries, where a government payment is offered to trade in cars that are more than a certain number of years old to promote uptake of more fuel-efficient models. The Chancellor has been urged to consider such a scheme to help flagging car giants, like Jaguar Land Rover.

D
Derivatives - financial contracts that are derived from the value of something else. The underlying value can be based on an asset, like stocks or residential mortgages, or an index, like interest rates or the consumer price index.

E
Employment and Support Allowance - a benefit paid on incapacity grounds which replaced Incapacity Benefit and Income Support in 2008. The principle of the allowance is that everyone should have the opportunity to work and those with an illness or disability should get the support they need to engage in appropriate work, if and when they are able.

F
Fiscal stimulus - a tax cut and or an increase in government spending designed to increase demand and boost a flagging economy. It has become a common term in the past 18 months as the government has sought to improve the country’s economy.

G
Gearing - the percentage of money a business has borrowed from the bank compared to money provided by the owners and other investors. For example, if a bank lends a business £40,000 and the shareholders provide £60,000 the gearing would be 40 per cent.

H
Hedge fund - is an investment fund open to a limited range of investors that is permitted to undertake a wider range of investment and trading activities than other funds, and pays a performance fee to its investment manager. They invest in a broad range of investments including shares, debt, commodities and so forth.

I
Individual Voluntary Arrangement - a formal alternative for individuals wishing to avoid bankruptcy. Introduced in the Insolvency Act 1986, it is a private agreement between a debtor and creditors about the repayment of debts, and can last up to five years.

J
Jobseeker’s Allowance - a form of unemployment benefit that is paid by the government to people who are unemployed and seeking work. There are two forms - contributions-based and income-based - paid by the Department for Work and Pensions. In Birmingham the total number of claimants rose by 12,383 in February as the recession took its toll.

L
Liquidation - the process by which a company, or part of a company, is brought to an end, and the assets and property are redistributed. It can either be compulsory - brought about by creditors - or voluntary - sometimes referred to as a shareholders’ liquidation.

M
Money purchase scheme - a type of pension arrangement under which a sum of money is accrued and used to secure a pension in retirement. It is sometimes known as a defined contribution scheme.

N
National Insurance - a system of taxes and related social security benefits, introduced in the National Insurance Act 1908. The system consists of taxes paid by employees and employers on earnings, and by employers on certain other benefits-in-kind provided to employees. It results in contributory benefits, where the claimant’s previous contribution record determines the availability and amount.

O
Offshore savings - cash in a bank located outside the country of residence of the depositor, typically in a country with more bank secrecy, less taxation and protection against political or financial instability. The government has intimated it is keen to cut down on tax evasion.

P
PAYE - short for Pay As You-Earn, it is an tax collected by employers on behalf of the government from employees. The amount is determined partly by the employee’s expected tax allowances, exemptions and reliefs, and partly by tax tables that determine the amount of tax to be deducted for the salary or wage paid to the employee.

Q
Quantitative easing - a policy to increase the supply of money by printing more. It is distinguished from the more usual practice of setting a target for a specific interest rate and continuously adjusting the amount of money to achieve that target. Central banks switch from interest rate targeting to quantitative easing when the interest rate is zero and they want to ease further.

R
Retail Prices Index - a measure of inflation based on prices in shops, published monthly and used by the government as a base for things like the indexation of pensions and the amounts payable on index-linked securities. It is distinct from the consumer price index (CPI), which is the average price of goods and services purchased by households.

S
SERPS - the State Earnings Related Pension Scheme - a top-up pension in addition to the basic state pension. It mainly benefits low paid workers who are not in a company pension scheme. It is now known as the State Second Pension, or S2P.

T
Trillion - the term now commonly used for one million million. Chancellor Alistair Darling was reported to have stored up big tax rises for the better-paid and huge curbs in public spending last year with a £1 trillion debt gamble to defeat the recession.

U
Underwriting - a person or organisation that signs as party to a contract. The underwriters are those who agree to bear all or part of the risk in return for the premium payments. The government has underwritten billions of pounds on behalf of troubled bank RBS.

V
VAT - or Value Added Tax - is a consumption tax levied on goods. In contrast to sales tax, VAT is neutral with respect to the number of passages that there are between the producer and the final consumer. The level was cut by the Chancellor by 2.5 per cent, to 15 per cent, in November last year.

W
Windfall - a one-off gain, in cash or shares, when mutual building societies convert to stock market-quoted banks, or are taken over.

Y
Yield - the income or profit arising from transactions such as the sale of land or other property.

Z
Zero energy building - a building with zero net energy consumption and zero carbon emissions annually. The Chancellor will be keen to encourage more to be built to stimulate the flagging construction industry and help towards targets that by 2016 all new-build housing will be zero carbon.