FT Adviser (20/03/2019) – People failing to save enough for their retirement are blaming jargon-heavy language from providers for their lack of interest.
Research from financial advice firm Portafina found more than half of people it questioned will not be able to achieve Living Wage income in retirement and many said pensions jargon and a lack of education was preventing them from saving into a pension.
The IFA firm’s research, conducted amongst 2,003 people aged 18 to 70 in February 2019, saw 84 per cent call for plain English pension documents.
The majority (55 per cent) of 30 to 50-year olds thought their pension savings would not achieve the Living Wage income of £15,269 per year when put together with their State Pension entitlement, while 35 per cent of Baby Boomers aged 55 to 64 thought their pension was not on track to deliver this income.
Of the older generation, people above the age of 65, 31 per cent felt their individual total pension entitlement was delivering less than £15,269 per year.
Just one in six (15 per cent) of 55 to 75-year olds estimated correctly that they would need about £200,000 in pension savings to hit the Living Wage retirement income target.
Alan Chan, director and chartered financial planner at IFS Wealth and Pensions, agreed pension jargon was not well understood by clients.
He said: “Sometimes because they don’t understand it, they won’t take any action, though it could be the best thing for them.
“Our job as advisers is to take away that jargon for the client and talk to them in a language that’s easy to understand. I’m a firm believer that we need to deliver financial education in schools from an early age so that children learn the basic concepts of saving and investing.
“This will help them to become more engaged by the time they are working and earning money.”
Full article link: https://www.ftadviser.com/pensions/2019/03/20/jargon-blamed-for-lack-of-pension-saving/
