Financial services can be complex, but it’s down to providers to make things as clear as possible
The prevalence of technical jargon is preventing people from investing, according to research by Saga Investment Services.
A survey of over 11,500 people conducted by the Financial Conduct Authority found that those over the age of 50 struggle to understand the most commonly used jargon in investment.
Eighty-six per cent knew what a SIPP (a self-invested personal pension) was and 59% knew what a defined benefit pension was.
One in 10 thought was that a defined benefit pension was the amount of money received from state pension.
There were also differences between genders with 53% of men more likely to know what an open ended investment companies, compared to 43% of women.
92% understood about income drawdown and taking an income from your pension while it was invested
93% correctly understood individual savings accounts (ISAs)
86% knew that a return is the amount made on an investment, while 14% described this wrongly as the interest rate on your investment.
Sally Merritt, head of product at Saga Investment Services, said: “The investment industry has often come under the spotlight for being confusing about charges, but now we are able to reveal that even the terminology is off-putting for many people.
“This is an unintended consequence of the way the industry has developed over the years. Financial services can be complex, but it’s down to providers to make things as clear as possible.”
Talk to a member of our team at Condies about your pension.