Neutral and effective pressure

Neutral pressure (pore water pressure), $u$: the pressure of the water filling the voids of a saturated soil. It acts equally in all directions, so it does not cause any shear strength or volume change in the soil skeleton. In a static water table, $u = \gamma_w h_w$.

Effective pressure (stress), $\sigma'$: the part of the total stress carried by the soil grains through their contact points. It controls compression and shear strength of the soil:

$$\sigma' = \sigma - u$$

(Terzaghi's principle of effective stress.)