Taking the jargon out of pensions

A new guide to pension’s language (consultation and draft guide published on 27th April 2016) could see the end of terms such as ‘uncrystallised pension funds lump sum’ and ‘flexi-access drawdown’ which have been used since the pension freedoms were introduced. Co-ordinated by the ABI, with the support of industry, government and consumer groups, the new guide aims to make pensions language simple, clear and consistent in order help customers better understand their options at retirement.

Many (possibly most!) people find the new retirement choices confusing, and across the long term savings sector, different terms are used to describe options. The guide, published today in draft form, aims to standardise the language used to describe options so customers can understand and compare products more easily without having to decipher technical terms.

For the guide and the language to be consistently applied across the sector, the ABI is consulting more widely to gather views, including from media and consumer organisations, until 19th June.

The ‘Making Retirement Choices Clear’ guide proposes the new retirement options be explained as:

  • You can keep your pension savings where they are
  • You can take your whole pension pot in one go
  • You can take your pension pot as a number of lump sums
  • You can get a flexible retirement income
  • You can get a guaranteed income for life
  • You can choose more than one option and you can mix them

The consultation was officially launched on 27th April 2016 at the ABI’s ‘Transforming Long Term Savings’ conference.

 

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