A recent study2 has found that a significant proportion of over-55s struggle to understand a range of key terms and rules relating to pensions. The survey asked 2,002 UK adults to identify and define various pension-related terms and acronyms.
Findings from the survey highlighted a serious lack of pensions knowledge, even amongst those people who have already reached an age where they can access any defined contribution personal pensions savings they have accumulated. With only one in five baby boomers (aged 55 to 75) able to correctly identify the definition of the Lifetime Allowance and almost two in three incorrectly defining the Annual Allowance, it is clear that many people are struggling to understand the terminology relating to their pensions.
In addition, very few respondents were able to correctly identify key pension acronyms. For example, only 4.5% recognised TVAs (transfer value analysis) and just 1% identified TVCs (transfer value comparator) as pensions acronyms. Adding to the confusion, around 4% of respondents in each case thought that the texting acronym LOL, the television shopping channel QVC and the footballing term ‘offside’ were all pension-related terms.
Cutting through the jargon
If you are one of the baffled and confused, then don’t panic, you’re certainly not alone! We know that many people view pensions as complex products and are often bemused by the complicated array of acronyms and jargon pension providers use. Funding your retirement and feeling confident that you understand your pension products is vitally important. So, we’re here to help. We’ll cut through the jargon, explain everything in plain English and help guide you through the pensions maze using language you’ll understand.
2Portafina, June 2019