UK consumers put off by just the word ‘pension'
Almost a fifth of 18-24 year olds are put off starting a pension purely because they don't like the word, new YouGov research commissioned by AXA has found.
If that number - almost a million 18-24 year olds - continue to delay starting their pension provision by just 5 years, they are potentially looking at a combined shortfall in their retirement income of £44.1bn, (£44,362.30 per person), making ‘pension' one of the most costly words in the history of the English language. In total almost one in five UK adults - over 10 million people - are being put off by the word pension.
Commenting on the research, Mike Morrison, Head of Pensions Development at AXA said: "It's clear that we need to get younger people thinking about their future financial stability much earlier. Trying to find a more compelling word or phrase is one simple thing we can do."
Just 4% of the UK population like the word pension, whilst - almost one in five (18%) associate it with ‘grey' and almost one in ten believe the word is too old fashioned.
Worryingly almost three-quarters of 18-24 year olds (72%) associate the word with old age. Such perceptions could mean that the younger generation are leaving things too late.
To combat such pension inertia, AXA has kicked off a search for an alternative word or phrase. As part of its My Budget Day campaign, AXA is working with Collins English Dictionary to ask the public to suggest a new name. All nominations can be made at axa.co.uk/mybudgetday and AXA will reveal the word or phrase, chosen by the public, on 06 December 2009.
Elaine Higgleton, Editorial Director at Collins English Dictionaries said: "The word 'pension' is part of the fabric of British life, but clearly some younger people are finding it off-putting. I'm not sure why: perhaps they associate it with a period of life that is just too far off for them to think about.
"Perhaps it's the association with 'pensioner', meaning 'an elderly person'. Or perhaps the recent and widely reported closing of final-salary pension schemes to new joiners is part of the picture. Whatever the reason, the word 'pension' does not seem to be encouraging people to save for the future, and a new name might give 'pensions' a new image."
AXA's New Name for Pension Campaign
The campaign will be launched on 23 November 2009. All new name suggestions can be submitted on axa.co.uk/mybudgetday or via Twitter with the #newnameforpension hashtag.
Entries will close on 26 November 2009 and an expert panel including representatives of AXA and Collins English Dictionary will select a shortlist of five potential names.
The public will vote on the five selected words or phrases and the chosen name will be announced on 06 December 2009 with the creator awarded one year's single person's full state pension - £4953.
The first organised pension scheme was for Royal Navy Officers in the 1670s.
1 January 1909 was Pensions Day - the day the first state pension was introduced. Means-tested, it was between 10 pence and 25 pence. It was introduced during the Liberal government of David Lloyd-George. Sir William Beveridge, father of the welfare state, was an adviser.
In 1925, the pension was 50 pence a week from 65. Today, it's £95.25.
The Pensions Act of 1995, which is concerned with the security of pension fund assets, was set up in response to the Robert Maxwell scandal.
In 2002, a British pensioner living in South Africa failed in her legal challenge against the UK government to have her pension up-rated with inflation. The ruling affects thousands of British ex-pat pensioners around the world.
The last American Civil War Widow's pension ceased paying out in 2004 (the American Civil War ended in 1865). Alberta Martin, reportedly the last widow of a Civil War veteran, died in May 2004 in Enterprise, Alabama. She was 97. At the age of 18, she married Civil War veteran William Jasper Martin, 81, who received a $50-a-month Confederate veteran's pension.