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.”