A recent survey5 that asked people over the age of 55 to define key words and acronyms relating to pensions found that a large percentage of the 2,002 respondents struggled to correctly identify and describe them.
DAZED AND CONFUSED
The results of the survey revealed that many baby boomers were failing to grasp important pensions-related terminology. Even among those old enough to be able to access any defined contribution pensions savings they may have accumulated, knowledge was worryingly poor. Nearly two thirds of 55 to 75-year-olds could not define the Annual Allowance, while over half did not know what the term ‘income drawdown’ meant. It is apparent that complex jargon is hindering over-55s’ ability to understand key facts about their pensions.
SHORT FOR WHAT?
Pensions-related acronyms also stymied many respondents, with an overwhelming 99% unable to say what FAD (flexi access drawdown) stood for. Just under 5% of respondents accurately described TVA as being short for transfer value analysis. Amid this level of confusion, it’s hardly surprising that 4% of those surveyed also mistook the texting acronym ‘LOL’, as well as the shopping channel ‘QVC’, for pensions-related terms.
ENDING THE PENSIONS PANIC
If trying to keep on top of pensions jargon makes you anxious, then this research should reassure you that you’re not the only one! Many people are mystified by the seemingly incomprehensible range of words and letters used. We believe that explaining the facts in straightforward terms is the best way to help you get to grips with your pension and achieve the peace of mind you deserve. We’ll end the pensions panic and get you on the way to funding your future with confidence.
5Portafina, June 2019
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.
