JP Morgan’s study shows only a fifth of Britons understand basic pension terminology, such as defined contribution (DC) or defined benefit (DB).
“Confusing financial terminology is contributing to the UK pensions deficit and it is worrying that this is delaying half of the UK from taking out a pension,” said Jonathan Watts-Lay, director of JP Morgan Invest.
“Clearly, as a nation we are lacking basic financial knowledge.”
His comments come as more pensioners face a retirement of debt due to poor financial planning, with a Friends Provident’s survey showing that people think they could retire on a lump sum that only pays £44.24 per week.
However, JP Morgan claims that part of the reason for poor planning is complex pensions vocabulary, with nearly half of those without a pension blaming jargon for putting them off.
In order to help educate people, get them to plan for their retirement and not spend it in debt, Mr Watts-Lay said that a guide to pensions jargon was now being produced.