Brits baffled by financial jargon
Confusing financial terms are encouraging people to ignore their pension provision altogether, new research has found.
The research from JPMorgan INVEST found that people were so confused that over a quarter thought that a CD (27% of people) and a DVD (31% of respondents) are pension terms.
Additionally, just 20% understood what basic pension terminology, such as defined contribution (DC) or defined benefit (DB) meant. Some 53% also thought that pension providers used financial vocabulary to exaggerate the complexity of pensions in order to confuse people into taking a pension with them.
On the back of the research, JPMorgan INVEST called for a simplification of pension communications to help combat the problem that it said was responsible for the fact that 40.5% of the UK workforce had insufficient plans to secure their financial future.
Jonathan Watts-Lay, director of JPMorgan INVEST, said: “Confusing financial terminology is contributing to the UK pensions’ deficit and it is worrying that this is delaying half of the UK from taking out a pension. Clearly, as a nation we are lacking basic financial knowledge.”