I am worried by the language that we are using in AgeWage. We are not being profane, or blasphemous, but we are not making ourselves understood , to each other , our investors and our future customers. We have not found a consistent set of words to explain what we are up to and I suspect we are not alone. There is a need for standardisation of terms used, so that people know what we are talking about.
So here is our first attempt at an AgeWage dictionary; I hope that people who love words – like Quietroom – will help us build and refine this dictionary and I hope that pension experts will challenge our words and definitions.
So here is the (dynamic) AgeWage dictionary
AgeWage– the wage we pay ourselves from our savings and get from pension(s)
Pension – an amount paid to us by formula (scheme pensions, state pension , annuities)
Savings – the amount we save
Pension savings – the amount we save for later age
Later age– the time we are relying on savings to get paid, rather than work
Work – what we do to get paid (unpaid work is different)
Unpaid work– what we do which isn’t paid
Member – someone who benefits from a pension scheme
Scheme Pension– a regular amount paid to us by formula from a Pension Scheme
Pension Scheme – an arrangement to pay money to us by a formula (a defined benefit) or as a scheme pensio pot
Annuity – a pension we buy with our savings
Drawdown – cash taken from a pot as an agewage
Lifetime annuity – a pension which pays as long as we live
Fixed term annuity – a pension that pays for a set number of years
Scheme pension pot – the amount saved in a pension scheme that does not offer a scheme pension.
Dashboard – something where you can see whats going on
Pension Dashboard- somewhere you can see what is going on with your pensions and pension pots
Defined benefit– a formula that tells us the pension we get
Formula – an agreed calculation which determines how much is paid into your pot or the pension you get in later age
Value – what we get from our savings
State pension – the AgeWage you get from the state
Money – what we save
Value for money – the amount we get from the money we save
AgeWage score – a measure of the value we get from the money we save
Pot – the value of our savings
Pension Pot – the value of our savings for our Later Age (really this should be a later age pot)
Lump sum an extraordinary payment from the scheme which can be taxed or tax-free
Tax relief at source – money that’s paid back into your pension by the taxman
Payroll tax-relief – (aka “net-pay”) tax paid back into your paycheque by the taxman
National insurance rebates; money paid into your pension by the national insurance people
GDPR – General Data Protection Regulation
DPA – Data protection act
Cash – money that’s not in a pot
Plan- the apparatus around a pension pot which forms a contract with the provider
Policy – the legal word for a plan
Policyholder – someone who owns a policy (aka plan)
Plan Provider – the organisation that offers a contract for a plan
Employer – an organisation which sponsors a plan or a scheme
Workplace – where we work
Workplace pension – a pension scheme that we join where we work (short for a workplace pension scheme)
Scheme Provider – the commercial organisation behind a pension scheme
Trustees – people who make sure the pension scheme is properly managed
Trust – a group of trustees that manage a pension scheme for an employer
Sponsor- somebody (usually an employer) who pays into a pot or agrees to fund the payment of a pensions
Master trust – a group of trustees that manage a pension scheme for many employers
Independent Governance Committee– people who make sure our plans are properly managed
Fund – a place to invest savings
Platform – a way of arranging funds that savers can choose
Assets – what our savings buy – whether in a fund or not
Data – information in digital format
Contribution – money paid into a plan
Contribution history – the data about all the contributions paid
Data set – all the data we hold for a person , organisation or as AgeWage
Adviser – someone who helps a member or policyholder with their AgeWage
Advice – help given to someone which is regulated by the FCA
FCA – the Financial Conduct Authority – supervises advisers and insurance companies
TPR – the Pensions Regulator – supervises pension schemes
Guidance – help you get which isn’t advice.
Lifetime mortgage – a product that turns equity in your house into later life cash or an agewage
Equity release – the process of liquidating money from your residential property.
If you’ve bothered reading this, please drop any suggestions into the comments box or tell me where we’re going wrong by mailing henry@agewage.com
It’s really important we develop a language which is consistent and helpful to ordinary people. It’s not about “jargon busting”, it’s about using words that make sense both inside the world of pensions and out!
A brave first effort.
I’ve collected various A-Z jargon guides over the years, and while attractive at first, they then simply gather dust on shelves. I’m no fan of indices, although hypertext links make them better.
Why not have to any statement or proposal an appendix which explains defined terms. It’s something lawyers do quite well early in legal agreements, even if they then spoil it afterwards?
As for the list so far, there’s nothing about taxation, annual allowances, tax free lump sums, etc.?
Terms you’ve introduced without explanation include “formula”
and “sponsor” (legally responsible for funding or collecting and making contributions).
Other thoughts include “state pension”, “commutation or cash options”, “CPI”, “GDPR”, “dependant benefits”, “pension sharing (orders)”, “transfer value (dirty words with you, Henry?), etc.
Thanks George- every time I get a response like this – I’ll do a bit of work. We are going to pin up the list on the wall of our office and read it to each other once a week – that’s the plan and I’ve written this down- so we’d better do it!
As for your suggestions – I’m surprised you didn’t include GMP equalisation!
How about:
Advice – objective advice from an expert
Regulated Advice – advice from an expert who might make money from their recommendation
Not a lot of terms for the non-wealthy there, such as:
Means-testing
State benefits
Safety net
Cliff edge
These are going to be included too Gareth – I’ll send you the new copy when I’ve done it (though I think your definitions of advice are a bit loaded!
Loaded? Of course, but advice is about a lot more than products and that’s what regulated advice means. I’m very happy to give people advice about many areas of their money (and I’ve got insurance to do it) but I’m not regulated by the FCA. If I point out to people that they should claim benefits they are entitled to, and calculate how much; then I’ll call that advice. I’m not though going to suggest that they put that extra money into the hands of Mr. Woodford or a. n. other.
This is looking great Henry.
A few thoughts:
Not sure you can shorten ‘workplace pension scheme’ to ‘workplace pension’, because you define ‘pension’ as what you get, not what you join (quite rightly).
Annuities: should be ‘a pension that you get…’ rather than ‘a pension that pays…’
‘Pension’ – it’s great that this is what you get, but I usually find it clearer to talk about a ‘pension income’ or ‘pension money’ (if it’s not necessarily an income), to differentiate it from the accumulation side.
‘Contribution’ should be banned. It’s a DB word and does not match what this really is in the DC world. Use ‘saving’ or ‘what you save’ etc.
Pension pot – I’ve gone off this phrase, in favour of pension account. The latter is much more resonant for most people, and accurately describes a personally-owned thing that money is put into for later. No one actually puts money in a pot – certainly not an employer – and it doesn’t sound very safe.
The “pot” is used by the Sun a lot and with great effect – they usually picture a witches cauldron – mysterious and toxic! It has gotten into the popular imagination and I worry about “account” -will think about this lot
Contribution is a bad word but I don’t think it’s a DB word – I prefer payments,
Top points very good