Pensions World

In the year that millions will start saving for their retirement for the first time, research by Nest shows that very few people think pensions are ‘straightforward’ (6%), ‘easy to understand’ (4%), ‘simple’ (3%), ‘interesting’ (5%) or ‘engaging’ (2%).

Only one in seven respondents (15%) finds the language used to describe pensions straightforward and easy to understand and only one in 14 (7%) thinks information from pension providers is better quality than other types of financial information they have seen.

The words people more strongly associate with pensions are ‘confusing’, ‘complicated’ ‘boring’, ‘difficult’ and ‘off-putting’.

The research results, released by Nest alongside a new version of its jargon-busting phrasebook, also shows that more than half (57%) said that sometimes pensions seem so complicated they can’t understand the best options available, while one in three people (29% of all respondents and 39% of Nest’s target group) are putting off thinking about saving for retirement because they find pensions confusing.

Nest chief executive Tim Jones says: ‘Pension jargon could be damaging people’s chances of building a better income in retirement. As millions of people are due to start saving for their retirement for the first time through automatic enrolment, Nest’s research shows that getting the language right is a challenge all pension providers will need to tackle.

The Nest phrasebook has also been well received by the pensions industry: Comments from experts include:

Stephanie Hawthorne, editor, Pensions World: ‘Parlez-vous pensions? It’s no longer a ‘foreign’ language! Congratulations to the Nest team who have translated the pensions legalese and demystified the jargon that leaves so many Britons bamboozled and without an adequate retirement income.’

Nick Timmins, policy commentator and analyst, Financial Times: ‘If you only read one book about pensions, read this!’

Doug Taylor, financial services chief advocate, Which?: ‘Unintelligible jargon puts people off financial products and Nest is doing a great job to help people understand what pensions are really about and how they work. All of the pensions industry should be following this lead and making pensions as simple to understand as possible.’

David Yeandle OBE, director, government relations, European Employers Group: ‘Very helpful, probably the most effective pensions jargon buster yet produced.’

Wendy van den Hende, chief executive, PFEG: ‘Personal Finance Education Group wants all young people to leave school able to manage their money. Nest's approach in making technical language easy to understand will be a great help in encouraging them to plan and save for the future - hopefully others in the finance sector will follow Nest's example.’ 

www.nestpensions.org.uk