A well-known song by the Who from 1964 is about "my generation". Included in this is the morbid desire of "I hope I die before I get old". That may well be some people's reaction when they see how much (or how little) their retirement income is projected to be.

Lower investment returns, raids on pension pots by various politicians and (to get more technical) falling gilt yields, (what does that mean?) have all resulted in smaller pensions. People are also living longer and this is having a dramatic effect on the size of annual pension income people can buy and is clearly impacting on the defined benefit schemes that are still open.

A twenty year old male in 1964 had a life expectancy of around 62 years, yet today's 65 year old can now expect to live another 12 years. So, the generation that Pete Townsend was singing about are not doing their bit after all and people are now (on average) older before they die.

But simply not saving enough is another major reason. How can we change that?

People say that they don't understand pensions and are confused about the terminology. A recent report from MRM tested people in their twenties understanding of pre-GCSE European languages and pension lingo and discovered greater knowledge of simple foreign phrases than basic pensions words such as "final salary", "annuity" or (and this is the big one) "auto-enrolment". Just 7% of those asked felt they understood what auto-enrolment means. Sacre bleu!

Many people also say that they cannot afford to save enough to provide them with all they desire in retirement and so they will choose to spend now and save later. There will always be competing priorities for things to spend on but better financial education can help people see that saving for the retirement rainy day that will come is just as important as that cup of coffee or new t-shirt.

So we, the industry, clearly have some work to do. To help this generation and all other generations understand the need to make provision for retirement – whatever method they choose – we need to educate and inform people without resorting to off-putting terminology and industry buzz words. Is it enough to insert a glossary or jargon buster into our scheme guides and tick the box? Good clear communication that engages people, explains the benefits, shows the features and helps people make informed choices MUST be the way forward.

We could write a song about that. Any suggestions?

Mark Belchamber, Director SHILLING Communication