It was found that many struggle to understand some of the most commonly used investment terminology, with 14% of people surveyed describing a return as the interest rate on an investment.
There is also a difference between the sexes when it comes to understanding jargon according to the study, with 53% of men knowing that an OEIC stands for an open-ended investment company, in comparison to 43% of women.
Saga Investment Services head of product, Sally Merritt, said: “The investment industry has often come under the spotlight for being confusing about charges, but now we are able to reveal that even the terminology is off-putting for many people.
“This is an unintended consequence of the way the industry has developed over the years.
“Financial services can be complex, but it’s down to providers to make things as clear as possible. It is time the industry adopt plain English.”
These findings come after the Financial Services Consumer Panel found last week that online investment and advice services are failing to communicate to customers how they work.
After assessing a report, conducted for the panel by Boring Money Ltd, it was concluded that these so-called ‘robo-advice’ services do not communicate clearly whether they provide regulated advice or guidance.
In addition, firms are not disclosing costs and charges in a way that allows consumers to understand how much they are paying, and for what, often using language that is difficult to understand.
Consumer Panel chair, Sue Lewis, said: “More and more people with relatively small amounts of money to invest are turning to online investment services, many of them with cash they have released under pensions freedoms.
“They need to know exactly what they are buying, what it costs, and what happens if something goes wrong.
“Most online firms are not giving them this information clearly, most of the time.
“It is obvious these firms do not have a clue how to communicate in a way their customers understand.”
The panel have called on the Financial Conduct Authority (FCA) to lead an industry and consumer-working group to develop simpler, more consumer-friendly, language to be used consistently across the sector.