Thousands of changes have been made by pension providers to the documents they give consumer materials, after a two-year industry initiative to make pensions language simpler, clearer and more consistent comes to an end.
The Association of British Insurers (ABI), which lead the initiative, said these “improvements will make it easier for consumers to understand their options at retirement, particularly in the wake of new and sometimes confusing options arising from pension freedoms”.
The changes stem from a guide, called Making Retirement Choices Clear, launched by the ABI in 2016, and will be visible to customers through a number of engagements, including written communications, web pages and in the language used in conversations over the phone.
The ABI said: “Consumers 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 – helping to create better retirement outcomes for all.”
Thousands of written documents were altered to align with the ABI’s simplified terminology, with one firm changing 800 documents alone.
An annuity, for example, is now referred to as a ‘guaranteed income for life’, while a single lump sum was changed to taking the ‘whole pension pot in one go’.
Language that could worry consumers was also softened - for example, changing “we have some warnings we need to give you” to “we want to help you make sure you’re doing the right thing”.
ABI also worked with the Plain English Campaign to initiate the training of all customer facing staff, with thousands already completing in-depth courses, it said.
ABI members also commissioned customer research to align simple language in a way that resonates with the consumers they serve, and initiated engagement with customers up to five years before their set retirement date, rather than six weeks before.
This was the case of pension provider Royal London, which revamped the information it sends to those approaching retirement - known as 'wake-up packs'.
Providers also replaced jargon and unnecessary technical language with visual metaphors and bespoke animations.
For example, one firm now uses an apple tree as a metaphor for a growing pension pot and withdrawal options.
According to Rob Yuille, head of retirement policy at the ABI, “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”.
He said: “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.”