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Nest attempts to demystify ‘baffling’ pensions

The National Employment Savings Trust (Nest) has launched a campaign to demystify the often bewildering world of retirement income, amid warnings of a mounting ‘pensions crisis’ in Britain.

 
Nest attempts to demystify ‘baffling’ pensions

The National Employment Savings Trust (Nest) has launched a campaign to demystify the often bewildering world of retirement income, amid warnings of a mounting ‘pensions crisis’ in Britain.

Nest officials announced the move at a conference in central London today, hosted by the Association of British Insurers whose director of Life and savings, Helen White, stressed the importance of communicating in ‘the simplest terms’ with people.

‘We are facing a pensions crisis in this country, with many people not saving enough for a comfortable retirement,’ she added.

Doug Taylor of Which? magazine, another participant at the event, pointed to widespread ‘pensions phobia’ in Britain and the low level of trust in the financial services industry.

The campaign comes as Nest races to prepare for sweeping changes to the UK pensions system take effect next year, when employers will either have to pay contributions into Nest or automatically enrol workers in existing pension vehicles.

As part of the campaign, Nest – which aims to tackle a lack of adequate pension savings among low- and middle-income UK workers – unveiled a phrasebook of key terms, along with an online game and Internet forum.

Steve Webb, pensions minister, said auto-enrolment of people into the Nest scheme will be ‘a social revolution’ that will make up to 10 million people think about pensions for the first time. He branded the research by Nest as crucially important, and lauded the phrasebook as a big step forward without which the state risked just ‘baffling’ people.

The Nest campaign was the result of 14 months of research across Britain into its potential members and employers. At today’s conference, Lawrence Churchill, Nest Corporation chair, said it had learnt that ‘appropriate terms’ could reduce barriers to understanding.

The phrasebook attempts to provide such terms. For example, it says the word ‘annuity’ should be avoided and replaced with ‘retirement income,’ defining this as a ‘regular income stream for the rest of your life.’

Nest is racing to develop a clear and simple language for pensions before ‘auto-enrolment’ kicks in next year – when employers will either have to pay a minimum contribution of 3% into the scheme or automatically enrol workers in existing pension vehicles.

According to Nest chief Tim Jones (pictured), the new workplace pension scheme hopes to get ‘quite a big viral kick’ out of the campaign. The game consists of a series of trivia questions on retirement income, in a user-friendly format which features an animated bird that somewhat resembles Nest’s logo, an egg.

In addition, Nest put together a short and amusing video showing how the general public can find popular pension terms confusing.

Jones also emphasised that pensions were a ‘low-interest product in a low-interest area’ for the general public.

1 comment so far. Why not have your say?

Brian Richards

Jan 13, 2011 at 10:28

What a mess , pensions are a dirty word, political football now, demystify my backside. The main problem is the general public dont understand investment and buy these dog pensions from banks and insurance co's. The word pension is now tarnished through the greed of bankers and insurance giants, most people understand bricks and mortar and feel safe with it.

When is the pension industry going to understand that they should provide a service and not feather their own nest all the time, just read the stories of unhappy pension investors. Thank god for SIPP's and we can look after our investment without too much red tape.

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