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7 out of 10 UK adults are puzzled by financial jargon

  • Less than two thirds (61%) of UK adults aged 18-24 have heard of the term “pension”
  • Only three fifths* (57%) of UK adults aged 18-24 are familiar with the financial term “inflation”, while just a quarter (25%) have heard of “contents insurance”
  • But 18-24s are most likely to be aware of the phrase “ESG fund”, compared to other age groups
  • People who have heard of financial phrases often don’t understand their meanings
  • Aviva campaign aims to help customers understand “puzzling” financial matters

Seven in 10 UK adults are puzzled by financial jargon, while three quarters are baffled by the term “the economy”, a new study reveals.

The research also finds those aged under-25 are least likely to feel puzzled by financial jargon, compared to other age groups, with around half (52%) of those aged 18-24 stating this, compared to 69% across all age groups.

However, younger respondents are most likely to find managing money puzzling, with around three fifths of 18-24s admitting this (58%), versus less than a quarter (23%) of those aged 55+.

The survey of 2,000 UK adults has been carried out to support a new campaign from Aviva. It is designed to help customers to better understand financial products and provide them with solutions to meet their needs, now and in the future.

Younger people are less likely to have heard of financial products and terms.

The study may offer an explanation as to why under-25s may be less confused by financial jargon; they are also less likely than other age groups to have heard of certain financial products and terms.

The survey finds, when faced with a list of financial terms, less than two thirds of UK adults (61%) aged 18-24 report they have heard of the term “pension”, compared to 97% of respondents aged 55 and above. Only a quarter of 18-24s are aware of the term “contents insurance”, compared to 92% of those aged 55+, while the phrase “inflation” is known to less than three fifths (57%) of 18-24s.

Awareness of selected financial terms among different age groups

Financial term / phrase

Proportion of people who have heard of this financial term according to the Aviva study

 

All ages

Aged 18-24

Aged 25-34

Aged 35-44

Aged 45-54

Aged 55+

Pension

84%

61%

67%

75%

89%

97%

Life Insurance

83%

61%

67%

75%

90%

96%

Interest rate

81%

58%

63%

72%

88%

96%

Inflation

79%

57%

63%

66%

89%

93%

Contents insurance

72%

25%

52%

63%

83%

92%

Equity release

72%

32%

49%

62%

83%

92%

Insurance premium

71%

37%

51%

65%

79%

89%

Comprehensive cover

69%

29%

45%

60%

80%

90%

Annuity

58%

17%

27%

44%

69%

82%

Pension consolidation

43%

22%

35%

38%

52%

51%

Gilt

38%

9%

17%

24%

40%

59%

Income drawdown

32%

10%

14%

19%

30%

52%

SIPP

27%

9%

13%

15%

30%

42%

Decreasing cover

23%

9%

20%

24%

26%

26%

Level cover

22%

12%

17%

20%

26%

25%

ESG fund

9%

13%

12%

8%

8%

9%

I have not heard of any of these financial terms before today

2%

4%

3%

3%

-

1%

Don’t know

2%

3%

3%

3%

2%

-

Source: Ipsos UK. Base: 2,379 UK adults 18+, fieldwork conducted using online i:omnibus, 1st – 3rd November 2022.

However, in spite of having heard of certain terms, people aren’t always confident about what they actually mean.

Less than half (43%) of people who have heard the term “gilt” understand its meaning, while two fifths (59%) of those who have heard of an “annuity” know what is meant by the word. Just 61% of people who are aware of an “ESG fund” feel confident of the phrase’s meaning.

Phoebe Barter, Brand Director, Aviva, says: “We understand that financial matters can be puzzling and our research highlights exactly this. It’s easy to stick our heads in the sand and ignore something we find complex and confusing. But we also know that when things are resolved and clear, it’s a huge weight off our minds.

“At Aviva we want to help our customers engage with their finances so they really click into place. Whether people want to make sense of their pension pots or understand how much cover they need for their home or their family, that’s exactly what we’re here to do. We’re here to help solve customers’ concerns, so they can focus on what matters to them and not spend time feeling puzzled.”

Aviva’s latest TV advert can be seen from 26 December 2022.

Ends

Sources

The research was carried out by Ipsos UK on behalf of Aviva. Ipsos UK interviewed a representative quota sample of 2,379 adults aged 18+ in the United Kingdom using its online i:omnibus between 1st and 3rd Nov 2022. The sample obtained is representative of the population with quotas on Age, Gender, Region and Working Status. The data has been weighted to the known offline population proportions for age, working status and social grade within gender, and for government office region and education, to reflect the adult population of the United Kingdom.

* Respondents were shown a list of 16 financial terms and asked to select which ones they had heard of.

Sarah Poulter

UK External Communications

Media enquiries

Notes to editors:

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