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Large degree of small-print difficulty

Research by consumer group Fairer Finance has found that a third of insurance policy small print is only understandable to degree holders.

The research suggests that none of the 280 documents tested could be understood by anyone with a reading age of 11. An estimated 16% of UK adults have a reading age of 11 or less.

Fairer Finance’s report goes on to say that failing to understand financial jargon costs UK consumers £21bn in a year – £428 for every adult.

"By communicating in a language that many people simply can't understand, banks and insurers are discriminating against large swathes of their customers," said James Daley, managing director of Fairer Finance.

"As well as being unfair, it is also bad business. If customers do not understand what they are buying, they are more likely to be disappointed. It is in everyone's interests that companies communicate clearly with their customers."

A recent report from the Money Advice Service suggested that four out of five UK adults don’t read the terms and conditions when they buy financial products.

A spokesman for the Association of British Insurers (ABI) said: "All insurers want to ensure that customer documents are as clear and transparent as possible.

"They will continually review their customer materials, as they want policyholders to read policies and understand what they are covered for and what they need to be aware of. We would also encourage consumers to read what they receive from their insurers, and speak to them if anything is unclear."

We’ve said countless times that small print is often purposefully off-putting and difficult to understand. We’ll continue to regularly make a big fuss until things change for the better.

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