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25 Apr 2018

Pensions industry simplifies retirement choices

Pension providers have updated the language in their literature and on their websites to make it easier for customers to understand their retirement choices.

It follows a two-year industry initiative to make pensions language simpler, clearer and more consistent.

According to the Association of British Insurers, the improvements will make it easier for people to understand their options at retirement, particularly in the wake of new and sometimes confusing options arising from pension freedoms.

The ‘Making Retirement Choices Clear´ guide proposed 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.

Other changes include replacing jargon and unnecessary technical language with visual metaphors and animations. For example, one firm now uses an apple tree as a metaphor for a growing pension pot and withdrawal options.

Meanwhile, language that could worry consumers is being softened, such as by changing “We have some warnings we need to give you” to “We want to help you make sure you´re doing the right thing”.

Providers have also worked with the Plain English Campaign to train customer-facing staff, with thousands already completing in-depth courses.

Thanks to the initiative, pension savers approaching their retirement should now be presented with simpler documents and information that will make their decision-making process a lot smoother, less daunting and more personalised.

Rob Yuille, head of retirement policy at the ABI, said: “It´s been widely acknowledged by the industry, regulators and government that pensions jargon is far too confusing for everyday consumers — even more so with the advent of pensions freedoms.

“The work being done by the industry to simplify and humanise the language used in retirement communications will give people more confidence and reduce anxiety when they come to making important decisions about their financial future at retirement.”

Copyright © M2 Bespoke 2018

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