Monday 24 October 2016

Consumers may be paying more in confusion over jargon

Published 04/06/2015 | 02:30

Young adults struggle the most with financial details
Young adults struggle the most with financial details

A THIRD of consumers say they are daunted by financial jargon, with younger adults struggling the most.

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The survey, commissioned by Royal London and conduced by iReach on 1,000 adults, found people were less likely to change insurer to get better value because of their lack of understanding of financial matters.

A lack of confidence in their understanding of financial terms was cited by 32pc of people for deterring them from switching insurers.

The Royal London survey also revealed that 31pc of all respondents feel they simply do not need to move insurers.

But experts at Royal London contend that this logic can too be flawed.

Joe Charles of Royal London said: "Financial products like life cover are serious in nature and the reason for buying them, or not, should be well thought out.

"But the fact that almost one third of people don't change their insurer due to a lack of understanding is worrying. The act of changing insurers can save people hundreds, if not thousands, of euro over the lifetime of a product."

He said most companies have worked hard, especially in recent years, to ensure that their products and their marketing materials are clear and concise, so people should not feel intimidated by them.

People between the ages of 18 and 34 were the most lacking in confidence when it comes to understanding the financial jargon involved in products. And men are the least aware of these cost savings, with 44pc revealing that they really don't see any need to switch, compared to just 24pc of women.

Mr Charles added: "People should be reassessing their financial products and services on a regular basis, because there is also often an opportunity to save money as a result."

He said the life assurance market is particularly competitive at the moment and there are large variations in the premiums charged by various insurers.

This means that there is huge scope for consumers to opt for a different insurer with a less expensive premium.

"Consumers should also be happy to know that in this market a lower price does not in any way signify an inferior product - they provide exactly the same level of protection, just at a cheaper price," he added.

Loyalty to a current provider appears to play little importance to many life assurance customers with males and young adults showing the least loyalty, the iReach survey found.

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