News: Pension jargon is biggest excuse for delay

A third of Britons delay their retirement plans because they don't understand the jargon, according to Six-steps.org a new website from Aviva that hopes to address the issue of jargon-blindness.

The research shows that a fifth of Britons think retirement is too far off to worry about now and 14% haven't thought about their future at all yet. As a result two thirds do not feel financially prepared for retirement.

Almost a quarter have admitted to not understanding financial terms such as NPSS or annuity, with a further 17% admitting they don't understand the subject of retirement and its associated issues.

It seems men are more confident that they understand financial terms with twice as many men (21%) saying they have a good understanding compared to just 11% of women. As a consequence, financial jargon is more likely to put women off from finding out more information about planning for their retirement - 34% of women compared to 29% of men.

Other excuses for not planning ahead for retirement include:

  • “It-will-never-happen-to-me”
  • One half of adults under 30 years old think planning for retirement is not worth worrying about because it is too far away.
  • Retirement is boring
  • 1.7 million Britons (4%) think retirement issues are boring
  • 'The ostrich effect': bury your head in the sand
  • 14% admit to never really thinking about their pension or saving for retirement

Corporate communications director, Lynne Gray, said: "It is concerning to see that so many are making excuses that could effectively put their future on hold.”

“Burying your head in the sand, being frustrated by financial literature or worse still being apathetic about your finances will leave you feeling financially underprepared and worried about your retirement. It is important for people to realise that there is advice out there on retirement planning that is easy-to-use and jargon-free."

Life's distractions

Distracted by the here and now, many Britons prefer to prioritise the more immediate issues they face. When thinking of the most important financial hurdles in their life, most Britons rank planning for their retirement only fourth most important, after buying a car (1st), booking a holiday (2nd) or buying or renovating a house (3rd).

“Britons tend to prioritise saving for two weeks in the sun rather than thinking about how they are going to fund 30 odd years in retirement," said Lynne Gray. “Short-termism is particularly prevalent in those aged between 18 - 29 years with half (48%) in this age range believing that retirement is not worth worrying about as it is so far away. This compares to 15% in the 30 - 50 year group and an unsurprisingly 1% in the over 50s. 

Financial products are complicated and there can be too much jargon so financial decisions can be difficult. Ed Balls, economic secretary to the treasury, said: “… This puts people off, or they can end up buying something that is not right for them. Sometimes people just want to discuss their financial options and not buy anything.”

“We believe there is a gap in the provision of this last type of advice - generic advice - and are pleased to see Six-steps.org playing a role in this area."

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