How Your Financial Literacy Impacts Your Financial Confidence

In one look

The language used in financial communications can be complicated and foster biases and stereotypes.

This can cause people to feel confused and overwhelmed and lack confidence in this area.

We regularly review the language we use – in person and in our communications – to ensure that you feel well informed and satisfied with your financial choices.

Almost all of us interact with the financial services industry in one form or another, often on a day-to-day basis.

Being able to do this effectively should therefore be simple, because it is so essential to all of our lives.

Yet financial products and services are often rendered unnecessarily complex by the language used by the industry to communicate with its customers.

Information provided by some financial providers is often littered with jargon, technical details, acronyms, risk warnings and disclaimers, making important documents difficult to understand.

You may even need a basic knowledge of Latin to set certain benchmarks, from ex ante and ex post charge disclosures (referring to expected and actual costs and charges) to the frequently used risk warnings emptor (“that buyer beware”).

Language barrier

“Lingo puts people off,” says Chris Marais, marketing proposals and content manager at St. James’s Place.

“Technical language can be assumed to convey expertise, knowledge and professionalism, when in reality it just confuses people.”

“Simple messages tend to get lost in the risk warnings that companies are required to include to comply with regulatory requirements,” he adds.

“This conformity is important, but it makes clarity of language and communications difficult. A good example is the letters you receive to confirm investments you are making, which often skip into technical details and don’t really help people know what to do.

According to a Post Office survey, seven out of ten British adults feel overwhelmed by jargon about money and savings.1 About half said they didn’t understand personal loans, APR (annual percentage rate), interest rates, tax codes, dividends, rebates or the stock market, while 20% pushed back on asking for personal loan due to confusing terminology.

The language used in communications can reinforce existing gaps and stereotypes, as well as the exclusion of people with certain characteristics. However, a change in approach can have a powerful impact. A project finds that women’s investment intentions increase significantly when digital stories curated by women are used in communications aimed at women.2

What is the impact of a lack of financial literacy?

The effects of jargon and miscommunication can be more widespread than meets the eye.

If the information provided to customers is not easy to understand, it will likely be more difficult for them to manage their finances. This can, in turn, impact the results they achieve, with further ripple effects on their confidence and overall well-being.

Almost nine in ten UK adults say they are not confident about their financial knowledge and a third say their mental health has suffered.3

“It makes the industry seem unreachable, overly complicated and distant, when in fact things like planning for the future and having the right insurance can be fundamental to our well-being,” says Chris.

What are we doing to make information more accessible?

Many companies are striving to improve their communications, while the Financial Conduct Authority’s new Consumer Duty – which emphasizes enabling customers to make informed decisions – is expected to speed up this process.

Ensuring we communicate clearly and give you useful information in an accessible way is a priority for us.

“You have to think of the audience first when you write. The way we articulate what we do is now more about getting it right,” says Chris.

This includes knowing what different customers need and want.

“Some customers want all the details, but others don’t want to know everything and just want the basics. You can improve understanding and literacy if you give people something to do, with tools that drive engagement such as online calculators and cursors.”

“It’s also about advising clients in clear, jargon-free language that they understand,” he adds. “In all of our communications with you, we aim to keep it simple, never using a long word when a short word will do. And helping you envision the future you want and focusing on clear benefits, we aim to inspire and encourage you to take control of your finances.”

“Our goal at SJP is to help our clients create positive outcomes and financial futures, and explaining things to people in plain language will help with that,” says Chris.

Our goal is to give you the confidence and ability to create the future you want.


1Financial Jargon Explained, Post Office, survey of 2,000 nationally representative UK adults, March 2022

2Breaking Down Prejudice, The Wisdom Council, March 2022

3The Great British Financial Literacy Test, Freetrade, survey of 2,000 nationally representative UK adults, April 2021

SJP Approved: 05/08/2022

Geraldine L. Melton