Over-55s struggle with pensions jargon

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.

Baffled…

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.

…and confused

In addition, very few respondents were able to correctly identify key pension acronyms. Over-55s struggle with pensions jargon 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

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FCA TO TACKLE WEB FRAUD

The Financial Conduct Authority (FCA) has established a ‘war room’ to tackle suspect investment schemes advertised online. This follows a wave of internet scams, often targeting vulnerable pensioners. The team aims to curtail the increasing number of internet-enabled fraudulent schemes, often operated by small groups of criminals, which are defrauding consumers out of hundreds of millions of pounds.

NS&I ATTRACTING YOUNGSTERS

National Savings & Investments (NS&I) has seen a sharp rise in new customers under the age of 16. This increase is partly attributed to a raft of Premium Bond rule changes, including lowering the minimum investment from £100 to £25. And further rises are expected later this year when, for the first time, any adult will be able to buy Premium Bonds for any child.

HMRC ‘CLUELESS’

A Freedom of Information response obtained by Royal London1 has revealed that HMRC ‘hasn’t got a clue’ how many fines have been issued for breaches to pension tax relief rules. The rules are complex and Royal London is arguing that, if large numbers of people are being fined, the industry needs to know so customers can be alerted to the issue.

1Royal London, July 2019

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