If you want people to understand you, keep it simple, writes Claire Shoesmith

How many times has your teacher set you homework only for you to get home and realise you have not really understood what you are supposed to be doing?

Or how about following instructions? Have you ever looked at the wording of an instruction booklet and wondered how many degrees you need to have taken to understand the information in front of you?

While this may not seem too harmful when bluffing your way through the deadline for your homework, or when mopping the kitchen floor because a certain member of your family didn't plumb in the washing machine correctly, it could be much more detrimental to your future when it comes to understanding financial products or labelling on food and drugs.

"Unnecessarily complicated wording causes problems for everyone," says Ben Beer, spokesman for the Plain English Campaign. "As a consumer, if you don't understand it you are left confused, and as a company you can lose out on sales and marketing potential if people don't understand what you are trying to say."

You need only to take a look at the websites of various banks and building societies with a view to opening a new account and you will come across an abundance of financial terms, many of which will probably leave you unsure of the precise meaning.

Moreover, it may take too much time to trawl through the small print entitled "terms and conditions" to find out just exactly what it is that you're getting yourself into when signing up for a new product.

According to a report released last month by the National Adult Literacy Agency (Nala) and EBS Building Society, only 45 per cent of the general public could correctly identify the meaning of the term APR - the figure showing the rate of interest and other fees a borrower pays on their loan each year in percentage. Some 18 per cent of those surveyed said APR referred to the amount of money a bank or building society was willing to lend a customer, while 34 per cent said that the APR represented the monthly repayment on a loan.

"Presenting something in plain English is not just about the words you use," says Tommy Byrne, Nala's public relations officer. "It's as much about the layout and design of printed material as the wording."

All information that is presented to the public needs to be very clear and easily understandable, says Byrne, adding that this can be to the advantage of both the consumer and the producer of the material.

"If people don't understand what they are reading then most of them will stop reading and won't bother to try to understand," he says, adding that financial documents in particular are "chock-full of jargon".

Last month's report makes 10 recommendations aimed at improving clarity in the use of English in documentation and labelling.

As well as calling for the establishment of a new working group in financial literacy, it recommends the Government set aside money to address the problem of jargon.

It also suggests that financial service providers should appoint an information officer in each branch to assist consumers with literacy and numeracy difficulties, as well as ensuring that they use plain English in their printed material.

While there is no legal requirement for institutions to use so-called plain English, the financial regulator requires that they "do not deliberately or recklessly mislead" consumers with their choice of wording and has issued a consumer product code to which financial groups must adhere.

Closer attention to such details should help to alleviate misunderstandings, and in the long run put an end to situations such as that found in a recent survey by Irish Life, where seven out of 10 people did not even bother to read financial brochures because they were put off by the convoluted language.