Almost half, 48 per cent, of people are not confident about the tax rules regarding their pensions, the Association of British Insurers has revealed.

The research has been revealed to compliment a new guide, which will be released on the 22 November, aimed at ending the use of perplexing language around pensions in the wake of the pension freedoms.

Co-ordinated by the ABI, with the support of industry, government and consumer groups, the ‘Making Retirement Choices Clear’ guide aims to make pensions language simple, clear and consistent to help customers better understand their options at retirement.

This guide aims to standardise the language used to describe options so customers can understand and compare products more easily without having to decipher technical terms.

Results of a recent survey by Populus found just 31 per cent of respondents disagreed with the statement, ‘The complexity of the language around pensions deters me from thinking about my finances in retirement’. The survey also found 48 per cent of people are not confident of the tax rules regarding their pension. Only 26 per cent reported themselves as being fairly confident.

The ABI said the results of the survey clearly demonstrates the need to look at other areas of pension communications, such as the messaging around tax relief, to ensure customers take full advantage of both employer contributions and the government top-up options.

ABI assistant director, head of retirement policy, Rob Yuille, said: “The industry recognises that pension language can be confusing and is often a deterrent for people thinking about their pension. We want to help customers engage with their long-term savings plans so it’s important that we, as an industry, make these options as clear and comparable as possible.

“This is a responsibility not only for the industry but for anyone communicating with the public about retirement options. This guide could make a real difference by helping people to better understand their retirement options and make decisions that suit their individual needs.”

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