Whether you have a State Pension, workplace pension, or a private pension, they determine our retirement planning, how much income we’ll have to live on later in life, and when we can afford to stop working. Because of this, understanding pensions should be a priority for everyone.
But new research by Wealthify shows that a worrying number of savers still don’t know what common pension terms mean — including those that have been headline news in recent years.
This lack of knowledge risks leaving people unsure about their options, meaning they could feel unprepared for the retirement they want. To help, we surveyed pension holders across the UK and combined these findings with search data, revealing not only how much terminology remains misunderstood, but also that many people are actively searching for answers online, and still coming away confused.
Take a look at the full results of our research below, covering everything from the most and least understood pension terms to how different age groups and genders engage with their pensions, and much more.
Jump to:
- What pension terms do people understand the most (and least)?
- What are the most searched pension terms?
- How do men's and women's attitudes towards pensions compare?
- Do pension holders understand upcoming pension reforms?
- How are pensions being taught in schools?
- Glossary: What do misunderstood pension terms actually mean?
What pension terms do people understand the most (and least)?
When it comes to pensions, jargon is everywhere. From acronyms like “AE” and “MPAA” to technical terms like “decumulation” or “carry-forward”, much of the language isn’t part of our everyday vocabulary. It’s no surprise then, that people struggle with it — but just how much?
Our research found that almost one in five pension holders (18%) admit they don’t understand a single pension term. Even the most widely recognised phrase, “pension pot”, is familiar to less than half of people (44%).
Full-word terms tend to be understood slightly more than acronyms, but the difference is marginal. On average, just 17% of respondents understood the word-based terms tested, compared with only 6% for acronyms. This means most savers remain in the dark regardless of whether terms are written out in full or shortened.
At the bottom of the list is “BSP”, which stands for Basic State Pension and is the old State Pension system for people who reached pension age before 6th April 2016. It is the least understood pension term overall, with only 2% of pension holders saying they know what it means.
Just above it are “NSP” (New State Pension), “MPAA” (Money Purchase Annual Allowance), and “VfM” (Value for Money), all of which were understood by just 3% of pension holders. While “TAA” (Tactical Asset Allocation), “decumulation”, and “GMP” (Guaranteed Minimum Pension) sit at 4%.
By contrast, the most understood pension terms are “pension pot” (44%), “salary sacrifice” (27%), and “annuity” and “pensions dashboard” (both 25%).
These knowledge gaps could impact the decisions people make about contributions, investments, and withdrawals. If you don’t know what a term means in the documents you’re sent, how can you feel confident that you’re making the right choice?
What are the most searched pension terms?
When people come across pension jargon they don’t understand, the natural reaction is to turn to Google. Every month, thousands of people type these terms into the search bar, hoping to find clear explanations. But when we compare search demand with our survey results, the gap between curiosity and comprehension is clear.
Take the term “annuity”, for example, our survey shows it’s understood by only a quarter (25%) of people, but generates more than 3,100 monthly Google searches. For clarity, a pension annuity is a type of financial product you can buy with your pension savings (usually during retirement) that provides you with a guaranteed regular income.
The same is true for “volatility”, which receives 2,400 searches per month; however, just 15% say they know what it means, despite it being an important part of how markets work that affects all types of investments – not just pensions, but stocks, bonds, ISAs, and any market-based investment. The pattern of limited understanding continues across many other pension-specific terms: “SIPP” (2,100 searches, 16% understanding), “GMP” (1,400 searches, 4%), “consolidation” (1,300 searches, 22%), and “AVC” (1,300 searches, 16%).
People are actively looking for answers but aren’t finding explanations that they understand. Instead of walking away informed, many remain confused, highlighting the need for simple, accessible education that makes sense to everyone. Here at Wealthify, we try to cut the jargon around investing by providing clear information to make pensions and investing easier to navigate.
Please note: Wealthify does not provide financial advice. Please seek financial advice if you are unsure about investing.
How do men's and women's attitudes towards pensions compare?
Our research also uncovered how the knowledge gap differs between men and women.
Women are more likely than men to start investing in a pension earlier in life, with our survey finding that two-fifths (42%) of women begin paying into a pension before the age of 24, compared with a third (33%) of men.
One in five (21%) women wish they’d learned how pensions work earlier in life (versus 17% of men), while nearly two-thirds (64%) wish they’d taken their pension more seriously when younger (versus 57% of men). And almost one in eight (12%) women say they’ve delayed or stopped contributing more to their pension due to a lack of knowledge and confidence (compared to 8% of men).
Knowledge gaps around terminology appear to be a major factor behind this, with women being twice as likely as men to openly say they don’t understand any pension terms at all (24% vs. 12%). When it comes to particular terms, some have more apparent gaps than others.
The biggest is “volatility”, which is understood by 21% of men but only 9% of women. This is followed by “triple lock”, which is understood by 21% of men and just 10% of women, while “drawdown” and “annuity” both show a 10-point gap.
This lower confidence and knowledge means that even if women are investing in their pension earlier, uncertainty about what terms mean may lead to more cautious decisions, which may impact their returns at retirement age.
Raising pension literacy and ensuring women, in particular, feel informed and confident could help narrow the pension gender gap, turning early saving habits into stronger retirement plans.
Do pension holders understand upcoming pension reforms?
Our research also shows that even the pension terms that are regularly featured in the headlines remain poorly understood by the public.
Take “pensions dashboards”, for example, which have been in development for years and repeatedly covered in the media. Less than a quarter (24%) of pension holders say they understand the term, and search interest is extremely low (0–10 searches a month), despite the fact that once fully live, they will allow people to view all their pensions in one place — a change with clear benefits for savers.
“Megafund” is another example of this. Linked to recent government proposals to consolidate workplace pensions into larger schemes, this term has been a focus of both policymakers and the press this year, yet only 6% of pension holders understand what it means, and again, search interest is negligible at 50 monthly searches on Google.
Even “triple lock”, a phrase that dominates the media at every budget and election, is far from widely understood. Fewer than one in six (15%) pension holders know what it means, and while search activity is higher than for “pensions dashboards” or “megafunds” (500 searches a month), it is still surprisingly low given its direct impact on the State Pension.
These terms are central to reforms that shape how pensions are saved, invested, and paid out in retirement. The fact that both understanding and search interest remain so low suggests that clearer communication is needed so that savers are not left in the dark about the changes that could affect their financial futures.
How are pensions being taught in schools?
Our research found that 61% of people wished they’d taken their pension more seriously when younger, so it’s no surprise that almost three-quarters (76%) also believe that pensions aren’t taught or discussed enough in schools or early adulthood.
Support for earlier pension education is especially strong among those approaching retirement (83% of people aged 55–65), many of whom now have first-hand experience of the pension system and regret not having had the knowledge sooner.
But it isn’t only older generations who feel this way. Half (50%) of 16–17-year-olds and nearly two-thirds (65%) of 18–24-year-olds also say they would like more pension education during school or early adulthood.
But it’s worth noting how far things have come.
Those now in their fifties and sixties went through school at a time when financial education wasn’t on the curriculum.
Today, financial education – including pensions – is taught in schools across England as part of the national curriculum through citizenship and maths subjects at secondary level, and through PSHE education, covering topics like savings, credit, insurance, and retirement planning. In Wales, Scotland, and Northern Ireland, financial education is introduced as part of the curriculum at primary school age.
This finding suggests that younger people recognise they would benefit from more comprehensive coverage of these topics. Even though retirement naturally feels far away at this stage of life, their awareness shows a mature understanding that this knowledge will become increasingly important.
To continue having a positive impact, pension education needs not just to appear on the curriculum but to be reinforced at key points in adulthood, so that knowledge is retained and built upon as people move through their working lives.
Glossary: What do misunderstood pension terms actually mean?
One of the main takeaways from our research is that pension terms can serve as unnecessary barriers, especially if existing explanations aren’t clear or accessible enough.
To help, we’ve put together this glossary of pension terms, explained in plain English, to support savers in feeling more confident about their financial future.
At Wealthify, we believe pensions shouldn’t be complicated. Cutting through jargon and making financial decisions easier is part of our mission. If you’re looking to take control of your retirement funds, our Self-Invested Personal Pension (SIPP) is designed to make the process simple. You can start with as little as £500, set up contributions in a way that works for you, and benefit from the 25% tax relief top-up, which means that for every £1 you pay in, the government adds an extra 25p. As an example, a £100 personal contribution from you would be topped up by £25, making it a total of £125.
Our investment team manages everything on your behalf — building and optimising your plan to suit your style, whether you prefer cautious, adventurous, or ethical investing. We can also help you consolidate old pensions from other providers into one place. That way, you’ll not only cut through the jargon but also keep your future retirement on track, with a pension that feels easy to understand and manage.
Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.
With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.
Wealthify does not provide advice. If you’re not sure whether investing is right for you, please speak to a financial adviser.
Methodology
- Survey conducted amongst 1000 working-age (16-65) pension holders in the UK via 3Gem between 27th June and 1st July 2025.
- Google search data for 31 pension terms collected via Ahrefs Keyword Explorer, updated 28th August 2025.
