Ageing population and financial services

This paper looks at the public policy implications of an ageing population, the impact on financial services and suggests actions for both us and the financial services industry to better support older people.

This publication is the first of a series of documents which we will publish as part of our focus on consumers. As stated in Our Mission, we would research consumer needs, attitudes and behaviour to set out an overarching strategy ‘Approach to Consumers’ which we will publish this autumn.

Occasional Paper: Ageing Population and Financial Services (PDF)[4] 

Chapters:

Executive Summary[5]  

Introduction[6]

Understanding older consumers[7]

Engagement with retail banking[8]

Third party access and planning ahead[9]

Later life lending[10]

Long Term Care[11]

Other issues [12]

Findings

When reviewing the treatment of older people, we found that there are risks that their financial services needs are not being fully met, resulting in exclusion, poor customer outcomes and potential harm. The issues appear to be driven by a range of interrelated causes. These include policies and controls that are not designed around consumer needs and unintended consequences of retail product and service design. 

While older consumers are not necessarily vulnerable, they are more likely than other groups to experience vulnerability at some point. This is particularly the case for those aged 75 years and over who represent the fastest growing segment of the UK population overall. We focused on the issues where regulation and financial services firms can play a role and make a difference. 

We have set out some ideas for firms to consider in ways that fit their business models, such as looking at product and service design, customer support, and reviewing and adapting strategies. 

We explore particular findings and ideas around understanding older consumers, engagement with retail banking, third party access and planning ahead, later life lending, and long term care. 

Supporting evidence

We have published two pieces of commissioned research by the Big Window to support firms in understanding the needs, circumstances, experiences and preferences of older consumers:

• the Ageing Mind[13] – a literature review of scientific research exploring the impact and effective of cognitive ageing, and 
• Coping mechanisms and Third party Access[14] – qualitative research exploring: i) the challenges faced by older consumers and their carers in accessing and dealing with retail banking products; ii) problems arising regarding third party access

The recommendations made in these reports are those of the Big Window, not the FCA. They do not constitute FCA rules, guidance, policy or other form of instruction to the industry. These pieces of research have been published alongside our Occasional Paper to support firms in understanding the needs, circumstances, experiences and preference of older consumers. This should in turn support the development of retail financial products and services that meet the complex and changing needs of this diverse group of consumers. 

Next steps

These issues will require action from multiple parties to address over time. In many cases, solutions do not lie within the remit of any one party.

We have considered who might be best placed to address the gaps to improve financial markets for older people including other bodies who might be better placed to take forward topics outside our remit. We anticipate a further review in three to five years of how the financial services industry is adapting to meet the needs of older consumers. 

We invite you to contact us if you wish to discuss the issues raised in the occasional paper. Please email [email protected] by 21 November 2017.