Financial education is desperately needed to help the average consumer understand basic taxation and avoid losing out, a panel of experts has claimed.
Talking on FTAdviser In Focus's latest podcast, Sarah Saunders, manager at tax advisory business RSM UK, said: "There isn't really education provided in schools, even for simple things such as understanding their PAYE coding, so people just have to accept that it is right.
"But the tax legislation itself is immensely complicated that what people might think is a simple question very rarely is. And because we are so deep within it, we sometimes forget that people don't know what we mean when we say a word that we use all the time."
Fellow panellist Martin Stewart, co-founder of The Money Group, agreed: "We should all be [paring down] our language. Those who work in financial services have forgotten what it is like to be a consumer, and we sit there and talk this language to the consumer.
"The reason consumers are not engaged as much is that they are not that interested and sometimes we think everyone knows what we know, when that simply isn't the case."
Peter Glancy, head of policy, pensions and investments at Scottish Widows, said: "The government deliberately has a lot of complicated and opaque taxes, and because of this, people don't notice how much the total tax take is. I think this is deliberate.
"It also uses tax to nudge people to do things what the government wants us to do, such as tax relief on contributions going into a pension. Some governments look at tax as a means of redistribution."
However, while we can use metaphors and examples to help people to understand what the taxes or allowances do, Glancy said it was also important to use the proper names to avoid confusion.
"It should be dealt with in schools as part of general financial education", Saunders commented. "So many people assume the government has done it right."
She added that whenever the government announces a tax simplification process, "tax specialists go pale" - the system is very rarely ever completely simplified.
"There is a huge educational piece", Stewart added. "We need to explain the importance of saving early on - a huge initiative the whole industry can get behind."
Glancy agrees: "It should start at school. People should understand about personal finance from school age", especially as there are government targets to help the next cohort of 2m young people leaving full-time education in the next few years, and becoming more financially savvy.
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simoney.kyriakou@ft.com