Just under three quarters (74%) could not identify any of the pension acronyms they were tested on
The majority of UK adults are unable to identify what common pension acronyms stand for, according to new research published by Aegon.
The survey of 2,000 adults, conducted by Opinium, tested respondents’ knowledge of pension terminology by providing them with an acronym and asking them to write down what it meant.
The survey asked the respondents to identify acronyms including defined benefit (DB), defined contribution (DC), lifetime allowance (LTA) and guaranteed minimum pension (GMP).
The most well-known acronym was self-invested personal pension (SIPP), which was identified by 8%. Just one in 50 (2%) could identify what ESG meant.
Just under three quarters (74%) could not identify any of the pension acronyms they were tested on.
Aegon pensions director Steven Cameron said: The financial services industry is not alone in loving an acronym, but that love is not shared by consumers.
He said: As the industry seeks to help people engage with their pensions and to deliver good outcomes, we wanted to test just how huge an understanding gulf there is. The results were eye-opening, and our industry needs to take note!
Providing clear and understandable communication is extremely important when it comes to explaining financial products and services. We should not underestimate the power of using everyday language as it can make a huge difference between confusing or helping people to better engage with their pension and make informed decisions, he said.
He said: Pensions can often seem daunting for those who do not know where to start, so it is important that the industry cuts out confusing acronyms and truly engages individuals with clear language.