Forget fiction - insurance Ts&Cs might be the longest read this World Book Day

·        Ts&Cs from travel insurance and investment firms average 24,000 words, on par with Shakespeare’s Romeo & Juliet

·        Car insurance Ts&Cs have the highest reading age on average at 19 years, while 1 in 7 adults in England has the literacy skills expected of a 9 -11 year old

·        Fairer Finance has launched its new and improved Document Analyser Tool, designed to help financial services firms make their documents clearer and simpler.

On World Book Day (6^th March), when millions celebrate the joy of reading, Fairer Finance reveals that many insurance firms, banks, and investment companies’ terms and conditions (Ts&Cs) are so long that they rival the word count of many literary classics. 

Furthermore, with over 18 months having passed since the introduction of the FCA’s Consumer Duty – which states that firms should communicate with customers not only in a way that is ‘clear, fair and not misleading’ but also to equip them with the information needed to make effective and informed decisions - the consumer group has found that the complexity of financial documents has barely improved.

Financial Ts&Cs can be as long as classic novels

Fairer Finance’s latest analysis finds that the average travel insurance and investment product Ts&Cs are 24,000 words long—the same length as Shakespeare’s Romeo & Juliet or Oscar Wilde’s The Importance of Being Earnest¹.

Some documents, such as the terms for Barclays Smart Investor, contain almost double the average, at over 47,000 words. This is greater than the word counts of The Great Gatsby (c47,000 words) and Animal Farm (c30,000 words).

Having examined the length of financial terms and conditions for over a decade, Fairer Finance has identified the financial products with the highest word counts. Travel insurance policies and investment terms and conditions top the list, closely followed by home insurance policies.

While average bank account Ts&Cs can tally almost 17,000 words, Danske Bank’s Personal Banking Terms and Conditions contains over four times as many, with over 72,000 words, almost on par with Harry Potter & The Philosopher’s Stone (77,325).

7.1m people are “functionally illiterate” yet reading ages for financial products range from 15 to 18 years old

The National Literacy Trust reports² that 16.4% of adults in England (7.1 million people) have “very poor literacy skills” classifying them as “functionally illiterate” as reading information from unfamiliar sources or on unfamiliar topics could cause them problems. These consumers with poor literacy skills are also deemed “vulnerable” by the FCA. Furthermore, the government estimates that one in seven adults in England (14.9%) has the literacy skills expected of a child aged between 9 and 11 years old.

Yet, despite this, Fairer Finance discovered that car insurance terms and conditions require the highest average reading age at 19 years on average (a reading grade of 14.5). However, there is much inconsistency within sectors. For example, the reading age ranges from 10.4 years to over 25 years among pet insurance providers’ Ts&Cs. 

Note in the graph above, reading grades are calculated by looking at the average word and sentence length of a document. To convert from reading grade to reading age, add 4.5. These reading grades are calculated using the Automated Readability Index.

James Daley, Managing Director at Fairer Finance, the consumer group and ratings provider, commented: “It’s disappointing that 18 months after the introduction of Consumer Duty, we’ve seen little progress in making financial terms and conditions clearer for customers. Too many firms still assume that no one reads the Ts&Cs, so there’s no urgency to simplify them.

“Yet the FCA’s rules make it clear that firms must ensure their customers can understand the information they’re given. Most Ts&Cs remain overly complex, excessively long, and far beyond the reading level that the average consumer can easily engage with. We’ve seen first-hand that it’s entirely possible to create clear, user-friendly Ts&Cs that still meet legal and compliance requirements. Customers rely on these documents as guides to their financial products, so they need to be well-structured, easy to navigate, and written in plain language.”

Fairer Finance has launched its new and improved Document Analyser Tool, designed to help financial services firms make their documents clearer and simpler. It is offering a free trial until the end of March 2025.

It has refined its jargon database to identify all jargon terms in a document as well as identify the most severe jargon; it offers new Readability Grades to get insights on a document’s complexity with the Automated Readability Index; and has Enhanced Document Metrics – to instantly see word, page, character, and sentence counts, as well as words per page - giving  a clearer picture of document length and density.

For more detail on Fairer Finance’s analysis of terms and conditions and policy wording please visit www.fairerfinance.com.

Notes to editors

For further information, please contact:

Karen Mignon, KM Comms: karen@kmcomms.co.uk / +44 7766 651327

Louise Ahuja, KM Comms: louise@louisebcomms.co.uk/ +44 7788 676913

¹ - https://literacytrust.org.uk/parents-and-families/adult-literacy/what-do-adult-literacy-levels-mean/

² - https://www.opensourceshakespeare.org/views/plays/plays_numwords.php and https://www.anycount.com/word-count-of-books/word-count-of-top-100-books/ and https://commonplacebook.com/art/books/word-count-for-famous-novels/

About Fairer Finance

Fairer Finance is an independent consumer group and ratings provider whose mission is to help create a financial services market that is fair for consumers as well as the companies that serve them. With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product Ratings are simply designed to help consumers make sense of the complex world of financial products. It rates over 9,000 products spanning over 20 sectors, ranging from bank accounts, credit cards, car insurance, and travel insurance.

Its Customer Experience Ratings are designed to help consumers make more informed decisions based on quality and service and not just price (eg trust, complaint-handling, transparency etc).