Workers need face-to-face advice about finance to have any chance of making the best decision on long-term saving, pensions experts heard in Edinburgh yesterday.

Just days after the government backed plans for a national money guidance service, the National Association of Pension Funds debated the key issue of education at its annual investment conference in the capital.

Heather McGuire of Associated British Ports said the company had staged roadshows in 2006 at its 17 port sites in the UK to explain to its 2500 staff the workings of its £485m scheme.

She said this and a previous communication blitz had produced a noticeable upturn in staff rejecting the "default" pension option and making their own choice. "My assumption on this is the more information people have the more they feel able to make their own investment choices."

She went on: "This sector has quite a low level of literacy."

For instance, most of the 500 people who attended the roadshows did not know that "equities", constantly referred to in pensions booklets, meant shares.

"People have heard of equity in your house and equity release and assume it means money and cash. If you are trying to get people to understand risk and reward you are not getting off on a very good footing if they don't understand the basic words."

Chris Pond, director of financial capability at the Financial Services Authority, said the FSA's £90m programme targeting 10 million people was based on some "scary" research which showed 81% of people knew the state pension was inadequate but barely a third of these were saving.

He said more than £15m was going into financial education in schools, while the FSA's recent launch of a finance guide for mums-to-be and its mortgage payment alert this week had been applauded.

"The real issue is about wading through the alphabet soup of financial services, which for many people is not really feasible."

Pond said the proposed money guidance service could reach out to four million people and "make a real difference".

Delegates also heard calls yesterday for pension funds to make a stronger commitment to climate change issues.

Stephanie Pfeiffer, of the Institutional Investors Group on Climate Change, said there was a "lack of formal demands from funds for their managers to take account of the issue", with only a handful of funds yet incorporating consideration of climate change into their formal process and only a few funds asking their consultants for advice.

She urged funds to "use your influence as major shareholders to urge governments to put in place the major policy frameworks needed for a shift to a secure low carbon economy".