Financial firms have launched a jargon busting guide to pension freedoms that aims to clear up some of the confusion around the brain warping technical language wrapped around money.
Although the guide goes some way towards clearing up so of the complicated terminology, consumers must still tackle those difficult acronyms.
Trade body the Association of British Insurers (ABI) took the job on, but their explanation of the task is spelled out as badly as much of the jungle of jargon that the financial industry wants to clear away.
The aim is advisers, providers, the government and other industry groups should all speak from the same sheet by using these terms to describe flexible pension freedoms:
- You can keep your pension pot where it is
- You can take your whole pension pot in one go
- You can take your pension pot as several lump sums
- You can get a flexible retirement income
- You can get a guaranteed income for life
- You can choose more than one option and you can mix them
“The results of the survey clearly demonstrates the need to look at other areas of pension communications, such as the messaging around tax relief, to ensure customers take full advantage of both employer contributions and the Government top-up options,” says the ABI report.
Clearly no one spell-checked the quote as ‘the results clearly demonstrate’ rather than demonstrates.
ABI Assistant Director, head of retirement policy, Rob Yuille, said: “The industry recognises that pension language can be confusing and is often a deterrent for people thinking about their pension.
“We want to help customers engage with their long-term savings plans so it’s important that we, as an industry, make these options as clear and comparable as possible.
“This is a responsibility not only for the industry but for anyone communicating with the public about retirement options. This guide could make a real difference by helping people to better understand their retirement options and make decisions that suit their individual needs.”
To arrive at the changes, the ABI asked consumers: to agree or disagree with the statement: ‘The complexity of the language around pensions deters me from thinking about my finances in retirement’.
Two thirds agreed.