Linda Woodall, Director of Life Insurance and Financial Advice at the Financial Conduct Authority (FCA), spoke at the launch event of the regulator’s Ageing Population Occasional Paper in October 2017.
Ms Woodall began by highlighting the extent to which the UK’s population is getting older. She said that “one in three babies born today can expect to celebrate their 100th birthday; by 2050, one in four people will be aged over 65; and those aged over 65 already outnumber those under 18.”
She went on to highlight some ways in which older consumers may be being disadvantaged by the financial services sector, including:
- They could find themselves excluded from some financial services altogether
- In other cases, they could experience poor customer outcomes
- Firms could to do more to support older consumers, both in how products are designed and how older customers are assisted by the firms
- Whilst not all older consumers are vulnerable, they are more likely to become vulnerable, whether this is through bereavement, poor health, loss of mental capacity or reduced financial circumstances during retirement
Next, Ms Woodall suggested that firms could involve older consumers in testing and product design exercises. She commented that “all too often, products and services appear designed for an ‘average’ consumer – who may not actually exist.”
Then she went on to encourage firms to think about how they could provide better support and service to older customers.
In conclusion, the FCA director highlighted that her organisation’s work on the ageing population was an ongoing exercise. She also hinted at possible changes to the FCA’s rules to ensure firms treat older customers appropriately. In her final remarks, she said:
“We will continue to pay close attention to issues that affect older customers, using our sector views and strategies to tackle harm and maintaining ongoing dialogue with firms, trade and professional bodies, and consumer groups.
“We anticipate further review in three to five years of how the financial services industry is adapting to meet the needs of older consumers. This will allow time for firms to respond to the issues discussed in our paper, and for us to consider if further rules are needed beyond the core requirement to Treat Customers Fairly.
“We encourage you to take forward the challenge, and implement solutions that deliver better outcomes for older consumers. Meeting that challenge will be good for consumers, for wider society and actually good for businesses too.”
Back in September 2016, the FCA identified some specific issues affecting older consumers, which included:
- Pensions – how effective competition can be facilitated
- Advice and guidance – there is a general need to improve basic financial capability and budgeting skills amongst older people
- Mortgages – a number of lenders are reportedly refusing to lend if the mortgage term would run past age 65
- Scams and fraud – the regulator acknowledges that older people are more likely to fall victim to fraud
The regulator’s discussion paper on the ageing population acknowledges:
- That the older generation may be less technologically aware
- Insurers may restrict access to their products for older people, by imposing higher premiums or setting maximum age limits
- Competition in the equity release market is limited
- Many retirees are accessing their pension funds without taking professional advice or consulting the Pension Wise guidance service
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.