Do You Understand Pensions Jargon?


 
It can be easy to forget when talking to clients that their level of understanding of the terms used in financial planning is not always as good as that of your colleagues. The jargon barrier is just one of the many reasons members of the public can be turned off financial planning for the future. 

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In fact, research conducted in 2017 by Aviva showed that two in five people ignored financial information due to their not understanding the jargon it contains. 
 
Insufficient Savings 
 
The lack of understanding surrounding pensions has led to people not saving enough for their retirement, research suggests. For example, around half of the public believe that the minimum auto-enrolment contributions of 8{3ac859de889331a6db9cdbc29fec38b641050304f3fd74ea28da928097c6db87} of annual salary is enough, but the reality is that they should be contributing around 13{3ac859de889331a6db9cdbc29fec38b641050304f3fd74ea28da928097c6db87}, according to financial experts.  
 
Education 
 
Financial education has been on the national curriculum since 2014, according to government guidelines, although less than half teach the subject. Even though, in theory, more young people will be finance-savvy in the future, there are still generations of people who are struggling to understand the importance and the workings of pensions schemes.  

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Independent Planning and Advice 
 
For this reason, independent financial advisers are on the front line, both in terms of education and helping customers ensure that their pension planning is sufficient. It’s more important than ever, therefore, to make independent pension planning straightforward, easy to understand and attractive to everyone. Dedicating time to help clients understand financial products is essential, and this can be helped by having software for financial advisers that takes care of the day-to-day tasks.  
 
In this digital age, customers also feel more confident if they can access their information online rather than wait for a jargon-filled statement. Software packages are available with a customer portal that can provide information, statements and ways to communicate with their adviser. You can click here to get options on software for financial advisers that may help suit your and your customers’ needs. 
 
It’s a worrying fact that many people are missing out on a better retirement due to misunderstanding the pension products on offer to them. It’s the job of the financial adviser to help them see through the jargon and set up a plan that will provide sufficient income to see them through their later years.