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Financial jargon 'drives customers away' from banks

Customers are being driven away from banks and building societies who bombard them with financial jargon, new research backed by the treasury has found.

Three-fifths (60%) said they were likely to stop saving with a particular bank or building society is they could not understand the terms and conditions, while more than half said confusing language could prompt them to switch banks, the study by National Savings and Investments (NS&I) found.

Julian Hynd, director of retail at NS&I said it was clear that customers are being bombarded with financial jargon but it was essential information that is relevant too them.

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'Confusing' financial jargon explained

New research suggests financial jargon could be driving customers away from banks and building societies.

Here are definitions of the terms that prove most confusing for customers.

  • FSCS stands for Financial Services Compensation Scheme. This is a safety net for people whose bank or building society goes bust that will compensate a consumer by up to £85,000
  • AER stands for the annual equivalent rate, which is used to help people compare returns on savings accounts means
  • Bacs is a central payment system used to process several different types of electronic payment, such as wages and pensions
  • Gross interest refers to interest that is paid before the deduction of tax

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