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Nest says “default fund” term may be scrapped

The National Employment Savings Trust has laid down the gauntlet to providers to improve member communications following the launch of a simplified pensions phrasebook.

Responding to a challenge from Nest chairman Lawrence Churchill on whether insurers would resist harmonising the language they use, Aviva UK Life chief executive Toby Strauss said: “We’ve far more to gain by working together than competing. We’re keen to work closely with other providers to have similar words and processes.”

The first version of the phrasebook, which is subject to change, summarises words and phrases to be avoided in member communication. For example, ‘Trivial Commutation’ becomes ‘Taking your retirement pot as cash’. Churchill also revealed that the term ‘default fund’, which appears in the phrasebook, could be scrapped and replaced with something members find easier to understand.

Nest chief executive Tim Jones (pictured) said: “It’s really exciting to get to the stage when we start to understand how we will talk about Nest. We also recognise the great work others have done. We want to join with them to encourage a consistent approach across the sector.”

Pensions minister Steve Webb said automatic enrolment would be a “social revolution”. He said: “As we move forward with radical reforms to automatically enrol people into workplace pensions it is vital that we use clear and simple language to make that process as straightforward as possible.”


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