Jargon related to pensions is putting more than 14 million UK workers off planning for their retirement, claims new research from Aviva.
The parent company of Norwich Union says research by the new ‘six-steps’ website launched last month, reveals 32%, or 14 million workers, delay their retirement plans because they don’t understand the jargon.
In addition, the survey of 2,679 adults by YouGov, shows 20% think retirement is too far off to worry about now, while 14% haven't thought about their future at all yet, and 65% do not feel financially prepared for retirement.
Meanwhile Aviva says 24% have admitted to not understanding financial terms such as National Pension Savings Scheme (Npss) or annuity, a further 17% admit they don't understand the subject of retirement and any associated issues, while 4% think retirement is simply boring.
However, the firm says men seem more confident about pensions, with 21% saying they have a good understanding of the terms compared to just 11% of women, and as a consequence financial jargon is more likely to put off more women, 34%, from finding out more information about planning for their retirement compared to 29% of men.
Lynne Gray, director of corporate communications at Aviva, says it is concerning to see so many people are making excuses which could effectively put their retirement future on hold.
She says: “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 there is advice out there on retirement planning and that it is easy-to-use and jargon-free."
Gray says the UK is currently gripped by a short term approach which needs balancing out, as essentially people in the UK tend to prioritise saving for two weeks in the sun rather than thinking about how they are going to fund 30 years in retirement.
And Aviva points out short-termism is particularly prevalent among those aged between 18 – 29, with 48% of these believing retirement is not worth worrying about as it is so far away, compared to 15% among 30 - 50 year-olds, and just 1% among the over 50s.
Gray adds: "We recognise there is a gap in financial literacy and apathy towards retirement planning and with the launch of www.six-steps.org we have made inroads to help improve the situation. We want people to feel confident about their financial future and so we offer an unbiased financial planning resource, free from jargon with the aim of helping people to start making informed decisions for their retirement."
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7034 2681 or email [email protected]IFAonline
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