Financial jargon 'confusing'

Confused consumers could take unwelcome risks

More than nine out of ten people find jargon used by financial firms confusing, and would appreciate greater use of plain English, according to a new report.

In addition, a third of the consumers interviewed admitted that they did not understand basic phrases which tell them how their pension or investment works.

Poor financial literacy and complex jargon are often cited as key reasons for poor take-up of savings products, and have also been cited in several mis-selling scandals.

The report from the insurance industry quality mark scheme calls on firms to reduce jargon in a bid to get Britons saving more.

Rubbish

The survey found that simple concepts are often made difficult to understand by the use of overly complex language.

For example, the words "inception" and "retrial" are often used instead of "start" and "retirement."

"There are a lot of words and phrases that need to be consigned to the rubbish bin," said Andrew Black Pensions Marketing Manager at Standard Life.

"The days when the financial services industry can indulge in its unique passion for obscure language are well and truly behind us."

As part of the industry quality mark scheme, eleven insurers have promised that statements sent to their eleven million policyholders this summer will avoid unnecessary jargon.