In the year that millions will start saving for their retirement for the first time, new research by NEST shows that very few people think pensions are ‘straightforward’ (6 per cent), ‘easy to understand’ (4 per cent), ‘simple’ (3 per cent), ‘interesting’ (5 per cent) or ‘engaging’ (2 per cent).
Only one in seven respondents (15 per cent) finds the language used to describe pensions straightforward and easy to understand and only one in 14 (7 per cent) thinks information from pension providers is better quality than other types of financial information they have seen.
The words people more strongly associate with pensions are ‘confusing’, ‘complicated’ ‘boring’, ‘difficult’ and ‘off-putting’.
The research results, released by NEST alongside a new version of its jargon-busting phrasebook, also shows that more than half (57 per cent) say that sometimes pensions seem so complicated they can’t understand the best options available, while one in three people (29 per cent of all respondents and 39 per cent of NEST’s target group) are putting off thinking about saving for retirement because they find pensions confusing.
NEST Chief Executive Tim Jones says:
‘Pension jargon could be damaging people’s chances of building a better income in retirement. As millions of people are due to start saving for their retirement for the first time through automatic enrolment, NEST’s research shows that getting the language right is a challenge all pension providers will need to tackle.
‘The latest version of NEST’s phrasebook includes new jargon-busting terms we’ve tested with our likely members and their employers to help make pensions easier to understand. We’re committed to talking about pensions in language that people understand and will continue to share our work in this important area as it develops further.’
Findings from the NEST/YouGov research - summary
• Hardly anyone thinks pensions are ‘straightforward’ (6 per cent), ‘easy to understand’ (4 per cent), ‘simple’ (3 per cent), ‘interesting’ (5 per cent) or ‘engaging’ (2 per cent). On the other hand significant numbers think pensions are ‘boring’ (17 per cent), ‘difficult’ (29 per cent) or ‘off putting’ (28 per cent of those surveyed and 40 per cent of NEST’s target group).
• Only 15 per cent agree that they find the language used to describe pensions straightforward and easy to understand and only 8 per cent agree that information from pension providers is generally clear and engaging.
• 1 in 2 people find pensions confusing (48 per cent) and complicated (51 per cent).
• 1 in 3 people (29 per cent all respondents and 39 per cent of NEST’s target group) are put off thinking about saving for retirement because they find pensions confusing.
• 50 per cent of people (and 67 per cent of NEST’s target group) say they find pensions harder to understand than other types of financial products. Only 5 per cent of all respondents say they find pensions easier to understand.
• Very few (7 per cent) think information from pension providers is better than other types of financial information they have seen whereas 1 in 3 (30 per cent of all respondents and 46 per cent of NEST’s target group) think it’s worse.
• 57 per cent agree that ‘sometimes pensions seem so complicated I cannot really understand the best options available’.
Background on research methodology
NEST/YouGov online survey conducted between 3 and 5 January 2012. 1,985 GB adults were interviewed and results are weighted to be representative of the adult population. Of those interviewed, 245 (weighted) were identified as eligible for automatic enrolment and with no pension savings and therefore in NEST’s target group.
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