Minister for Pensions Steve Webb said:“In a world where seven million people aren’t saving we simply can’t hide behind unintelligible language and confusing jargon. This was never more important that right now as we move towards the launch of automatic enrolment.
“This is a challenge for us all to make pensions easy to understand, so that people do not give up saving at the first hurdle.
“This is not about dumbing down a subject that by its very nature is complicated. It’s about not hiding behind confusing phrases and doing our best to make this subject easy to understand to people beyond those that work in the industry.
“Our guide will recommend using phrases like, ‘retirement income’ instead of ‘annuity’, or ‘different types of investment’ instead of ‘asset classes’. We will speak about ‘taking your retirement pot as cash’ instead of the baffling term ‘trivial commutation’.”
The guide will be a work in progress , but some examples of the language commonly used, and what it could be replaced by, include:
Accumulation Adding to your retirement pot
Annuity Retirement income
Assessing Options Shopping around
Asset classes Different types of investment
Decumulation Opening your retirement pot
Trivial Commutation Taking your retirement pot as cash
The guide is available at www.dwp.gov.uk/docs/auto-enrol-language-guide.pdf