Puzzled by pensions? – Richard Lishmann

Featured Products Promotional Features

  Posted by: Dental Design      17th January 2020

According to a recent survey, British individuals routinely struggle with the jargon used in pension policies. This means that they are unlikely to have a full understanding of what sort of policy they are entering into.

In this study, individuals were asked to spot the real pension terminology and anagrams from the fake. This meant that participants were faced with terms such as Lifetime Allowance alongside acronyms popularly used in other aspects of life such as LOL (used as an abbreviation of laugh out loud) and asked to identify their meaning or pick them out from fake terms. Worryingly, the results showed that some terminology that can have a big impact on pension policies, such as Lifetime Allowance, was misunderstood by up to 82% of participants.[i] 

Confusion and consequences

Arguably, the main cause for this confusion is that legal jargon is so separated from the words that people use in everyday life. It’s been suggested time and time again that jargon in all fields can be alienating for those hearing it, and whilst this can merely cause someone to feel a bit bewildered, there are more serious consequences connected to this as well.

The first thing we need to consider is that people don’t like to look like they don’t understand something. It’s a common fear that people think they will be misconstrued as stupid if they don’t understand something first time, and this will likely prevent them from asking questions and clarifying what they are hearing.

In a legal sense this can be very problematic, as people can easily agree to policies with terms that they don’t fully comprehend. This can result in them ending up with a policy that doesn’t fully meet their needs or which has certain caveats that can be detrimental to the final figure they are able to access when they choose to retire.

Pensions in dentistry

Of course, the use of dental jargon will be familiar to the majority of dental professionals, but legal jargon is a different breed. This is especially worrying for dentists as they are technically counted as self-employed and will have to seek different pensions plans compared to a large portion of the working public.

This opens up many choices, and these can fast become overwhelming, especially as every type of pension inevitably has different Allowances and Limits. For example, have you considered the possibility of getting a Stake Holder Pension? This is a different type of Personal Pension Plan that was originally conceived for people earning less than £18,000 per annum. However, as time has gone on, it has become clear that these pension plans hold a number of benefits for those earning much more, and one of these plans can easily be taken out alongside your other pension policies so that you can save even more.

However, some pension plans can have a sting in the tail if not managed properly. It was only recently that high earners were faced with huge tax bills after the introduction of Tapered Annual Allowance, and this cost some individuals as much as £13,500 in fees that could have been avoided.[ii] What made this situation worse is that the individuals who had been hit by these fees were also restricted in how they were able to pay off their unexpected tax bills. While many people supposed that ‘Scheme Pays’ would be able to be used for these tax charges, many didn’t realise that Tapered Annual Allowance meant this was not always an option, meaning they had to dip into their own funds.

Ge the advice you need

As you can see, pensions are not something to go into without full knowledge of what these policies can mean. With so many different options available and with jargon being a mainstay in all types of pension policy, it really makes sense to seek advice from those who can help provide unbiased and knowledgeable support.

The award-winning team of Independent Financial Advisers at money4dentists have years of experience helping dentists navigate the pitfalls of pensions and always help ensure that every individual ends up with a pension plan that’s best for them. Together we work with you to explain all of the jargon and explore all of the different possibilities so that you never go into anything without knowing exactly what you’re signing up for. This way we make sure you can save the most amount of money possible and invest in policies that will give you the savings you need for the future.

Pave the way for the rest of your life

Pensions can seem daunting but they are essential to understand in order to achieve your saving goals for retirement. No matter the stage of your career that you’re at, it’s always good to explore the options and see what sort of policies are best for you. By enlisting the help of professionals who understand pension plans you can rest assured that you are saving wisely, you won’t get caught out by any changes and you can make any financial goal a reality.


For more information please call 0845 345 5060, email info@money4dentists.com or visit www.money4dentists.com


[i] Portafina. Can You Spot the Real Pension Terms from the Fake? Link: https://www.portafina.co.uk/blog/can-you-spot-the-real-pension-terms-from-the-fake/ [Last accessed October 19].


[ii] Financial Times. High Earners Face Pensions Tax Taper Shock. Link: https://www.ft.com/content/3bc915ce-92f0-11e7-bdfa-eda243196c2c [Last accessed October 19].

No Comments

No comments yet.

Sorry, the comment form is closed at this time.