Public so spooked by annuities that ghouls are easier to explain

More people would find it easier to explain the existence of ghosts and detail the offside rule than would be able to describe annuities and pensions. That was the conclusion of a survey by Friends Life, which found widespread ignorance about pensions. The level of knowledge about retirement income was so poor that researchers found more people able to explain the complexities of the offside rule. The poll of 2,000 adults, carried out as the new Premier League season began at the weekend, found one in five saying they would find it easiest to explain the notoriously mis-understood football rule.This compared to just one in 20 who felt most confident describing a pension. {desktop}{/desktop}{mobile}{/mobile} Understanding of the term 'annuity' was also particularly low despite all of the headlines this year about the Chancellor's radical reforms to the system, which include allowing people to access their pension pot without buying one.When asked about what they understood of the term annuity more people felt it would be easier to explain the existence of ghosts, Friends Life found.Researchers said there was a further "worrying trend" with only one in 10 saying they could most easily explain life insurance – despite being one of the most common forms of protection insurance.Colin Williams, managing director of corporate benefit at Friends Life, said: "This just goes to show just how important it is that consumers have at least some understanding of their finances."The offside rule is notoriously tricky to describe, so to hear that more people would find it easier to explain than a pension or life insurance is a concern."Pensions, annuities, income protection, these are terms that more people need to be aware of because they're important financial products."Income drawdown – the way many people will soon be able to access their pension savings – came out even worse in the poll. More people thought it would be easier to explain the 'big bang' and particle physics.Mr Williams said: "Getting more people able to explain income drawdown over the offside rule might be a little ambitious, but as the world of retirement is changing we need to make sure people's understanding increases as well."Income protection (IP) did not fare much better despite Which? describing it as "the one protection policy every working adult in the UK should consider".The poll showed that more people felt it would be easier to explain the human digestive system or how rainbows are formed compared to IP.

Public so spooked by annuities that ghouls are easier to explain

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