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The ageing population – how should financial institutions respond?

  • United Kingdom
  • Financial institutions - Retail finance


The UK has a growing older population: By 2020, the number of consumers aged 65 plus is expected to increase by 1.1 million with suggestions that one in seven of the population will be 75 plus by 2040; a product of increasing life expectancy. This demographical change has drawn the attention of the FCA; its views and concerns set out in its Occasional Paper ‘Ageing Population and Financial Services’ published on 21 September 2017.

The key issues identified by the FCA following the launch of its ‘Ageing Population Project’ in 2016, and the focus of the paper, are:

  • Understanding older consumers especially in light of their particular needs, vulnerabilities and banking preferences;
  • Engagement with retail banking and the specific challenges older consumers may face with current retail banking practices (for example, the use of automated technology, lengthy call menus for telephone banking);
  • Third party access and planning ahead particularly when considering the need to manage money easily and safely where a third party, such as a carer, is involved;
  • Upper age limits and product innovation in the mortgages sector which focuses on the suitability of products currently available on the market and how these meet the needs of older consumers; and
  • Long term care which addresses whether consumers are able to access regulated, financial advice which is clear, accurate and appropriate when they are looking to fund long-term care needs.

As part of its project, the FCA commissioned external research by ‘The Big Window’, a consultancy which analyses the decisions made by consumers to address the needs, key behavioural drivers and motives that steer decision making by targeted groups of consumers – in this case, older consumers. Two specific research pieces ((1) the impact and effect of cognitive ageing and cognitive decline; and (2) a specific study into points 2 and 3 above) focused the FCA’s understanding of the issues.

Next steps

The FCA considers that firms can do more on this issue. The Occasional Paper highlights good practice and ideas, which firms should consider as part of their Treating Customers Fairly strategy. The FCA recognises that these are diverse challenges that firms need to address in ways that fit their business models. Ideas include:

  • reviewing branch environments in light of mobility issues suffered by the ageing population;
  • creating a balance between modern, technology based banking and traditional face-to-face interaction (the latter generally being preferred by older consumers);
  • creating campaigns to raise awareness of the issues older banking consumers face (marketing, training carers and ‘frontline’ branch staff);
  • simplifying online banking processes for older consumers (supporting set up of online accounts in branch, creating secure options to authorise access by carers for some levels of day-to-day banking); and
  • working with other organisations (including the NHS, charities, solicitors, local community groups) to support the older population and understand their specific concerns on a local level.

The FCA is not proposing rules or guidance at this stage but anticipates a further review in three to five years of how the financial services industry is adapting to meet the needs of older consumers.

In the short term, firms should consider providing comments to the FCA on the Occasional Paper. The deadline for comments is 21 November 2017. Looking ahead, firms will need to assess and respond to the issues discussed in the paper as the FCA notes that it will continue to pay close attention to issues that affect older customers through its ongoing work with firms, trade and professional bodies, and consumer groups. Firms should take note that the FCA states that it will consider intervening if harm has crystallised or is increasing.

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