No one needs any reminder that the number of elderly people in the UK is increasing rapidly. Money and Pensions Service (MAPS) chairman Sir Hector Sants chose the Finance UK Later Life Lending conference in July 2019 to explain the work his organisation is doing to provide guidance to older people.
After producing some statistics about the ageing UK population, Sir Hector commented on the wealth differences amongst the older generation. The average person aged 65 and over has £45,000 in cash savings, and around half of this generation own a property valued at £250,000 or more. 43% of the UK’s housing wealth is held by over 65s, yet although some people regard the older generation as being well off, not everyone is enjoying a prosperous later life. Sir Hector said that one in five pensioners had £1,000 or less in savings, and a similar proportion did not own their home.
The next section of the speech addressed the topic of care provision. As the number of older people increases, so does the need for long-term care. However, Sir Hector said that less than 30% of over 65s have a financial plan regarding what they would do if they fell ill.
Despite the relative wealth of the older generation when compared to younger age groups, many older people do not feel comfortable managing their finances. 24% of older people in retirement do not feel confident in this area and 19% say they get anxious over money worries.
Sir Hector said that firms did not need to assume that all older customers were vulnerable customers. However, he did say that older people are more likely to display some of the characteristics of vulnerability, such as poor health, bereavement and disability. He also commented that older people are more likely to fall victim to scams and may sometimes feel excluded from the modern financial world due to their lack of confidence when using technology.
The MAPS chair then suggested authorised financial services firms should focus on ‘customer wellbeing’ as well as treating customers fairly. All customers should be seen as potentially vulnerable and firms should seek to have ‘customer wellbeing’ ingrained in their corporate culture.
Sir Hector said that his organisation’s ideas to address the issues faced by older people was for older people to have some form of ‘later life review’ or a ‘financial MOT’. This review could examine issues such as planning for long-term care needs and considering whether it was appropriate for older people to release equity in their homes.
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