Using language to close the financial literacy gap

Written by Sarah Hawke

We all deal with our finances every day – from sending money to family using an app to investing for our future. But money management doesn’t come easily to everyone.

And not being able to understand messages about money can lead to people being excluded, a catastrophic outcome for pension savers. How are pension savers supposed to make the right decisions for their future if they don’t understand the information they’ve been given? That’s why it’s essential that the messages we send about money are clear and easy to act on, no matter who we’re talking to.

The issue of financial literacy is one of diversity, equity and inclusion. The National Financial Capability Study in the US developed a quiz that asked people to answer questions about mortgages, bonds and inflation. And they found big differences between demographic groups. Compared to their counterparts, people with the lowest financial literacy rates were those with less formal education, those who earnt less than $25k, Black people, young people and women.

44% of LGBTQ+ survey respondents said they struggle to maintain adequate savings compared to 38% of the general population, according to a report by Experian. And their LGBTQ+ respondents said they would like to learn more about financial behaviours.

Many socio-economic and political factors have contributed to the gaps in financial knowledge that affect some groups of people more than others. One study claims the gender gap in financial knowledge may be a hangover from outdated gender roles – man looks after money and woman looks after baby, house, elderly parents and man.

So how can member communications be used to help with financial literacy?

What we write and how we write about finances is one way to bridge the gap and engage with a more diverse group of people – whether that’s different ethnicities, gender identities and sexualities as well as class, cognitive diversity and beyond. Writing about pensions with different people in mind – not just the few who are already engaged or have prior knowledge – will enable more members to make better decisions about their futures.

Here are a few tips to help you break down language barriers to make your member communications more inclusive:

  • Avoid masculine-coded language

We often see businesses using masculine-coded language in member communications – from benefit statements to member-nominated trustee vacancy ads. Using phrases like ‘discharge their duties’ and ‘serve for a term’ makes a new job opportunity sound like the army. Or prison. And this can discourage women and non-binary people from applying for these jobs.

Studies show that using a neutral tone, or even more feminine-coded language like ‘responsible’ or ‘committed’, doesn’t actually deter men from applying. But it’s more appealing than masculine-coded language to people of other gender identities.

So a phrase like:

‘All Trustees will receive appropriate training to help them discharge their duties and will normally serve for a term of up to six years.’

would be better if it was written in a neutral way, like this:

‘We’ll give you all the training you need. Normally you’ll be a Trustee for up to six years.’

The last sentence appeals to everyone and means more people are likely to read the information and apply for the role.

  • Embrace language accessibility

Use different forms of language accessibility for people with disabilities. There are many types of accessible language formats, so it helps to know your target audience.

How will they be interacting with your communications? They might need audio descriptions, subtitling on your videos or large print options for your newsletters. The government has published guidance on language accessibility, which you can use to check you’re inclusive of everyone in your audience.

When in doubt, use plain language so you can connect with more people who depend on your services. Technical jargon excludes people who are less financially literate. People can’t understand what you’re trying to communicate. So strip it back. Make your writing simple and clear. Cut the words you don’t need, use the active voice and write sentences that stick to one idea.

  • Write like a person

Legal-sounding words and phrases give the impression that there’s a catch. It’s the quickest way to put someone off, because it suggests you can’t trust the information – or the person who wrote it. There’s a strong urge to be extra formal when we’re discussing money, but there’s no need, and it does more harm than good. Let’s remove words and phrases like ‘prudently’, ‘conscientiously’ and ‘with regards to’ and write like how we would talk to a real person.

  • Ditch unnecessary analogies and obscure metaphors

Unnecessary analogies, obscure metaphors and complex language are a sure way to alienate people from understanding your message.

‘Our assets are up this year, proving that we can roll with the punches.’

‘We’re looking for someone who can really push the boat out.’

‘Our trustees wear many hats.’

These phrases make it easy to lose track of what someone is saying. If in doubt, move towards more neutral language rather than metaphorical phrases – it’s easier to understand, which might be particularly important for readers whose first language isn’t English, or those who don’t readily understand metaphor.

Member communications that take into account the people they’re talking to can make a huge difference to members’ financial literacy levels. Applying the tips above to your annual benefit statements, fund factsheets or onboarding documents is an easy way to guarantee your members are more clued up on their pension, and take the action they need to give themselves a better retirement.

This article first appeared in Redington’s Defined Contrarian