Better interest rates needed for the over 80s
Published on 08 March 2014 12:30 AM
The top banking concern for people aged 80 and over is poor interest rates on savings accounts, according to an Age UK survey.
The survey found that 37% - more than 1 in 3 - of people aged 80 and over want better rates on their savings accounts.
The findings, just days after the fifth anniversary of the Bank of England's decision to cut interest rates, underline the importance for this age group of making the most of their savings.
At a time of rising energy and fuel bills, savings may be the only source of income beyond the state pension for many in their 80s and above.
Those aged 80 and over 'often overlooked'
The Age UK survey also highlights the continued importance of the branch network to older people.
79% of those aged 80 and over still have their main account with the branch of a high street bank or building society, with only 5% using an online account. Even for over 50s as a whole, only 7% use an online account as their main account.
The survey comes on the eve of the Charity's summit on financial resilience among those aged 80 and over. Financial resilience enables people to withstand challenges that may crop up in later life.
Government ‘woefully unprepared' for ageing population
Despite being the fastest growing sector of the population, those aged 80 and over are often overlooked in terms of financial services. Age UK's survey reveals that only 20% of those aged 80 and over feel they get a personal service from their bank or building society.
The summit is part of the Charity's Financial Services Commission and was inspired by Lord Filkin's report last year which warned that government and society are ‘woefully unprepared for the UK's ageing population.'
The Commission brings together government and leading industry figures and is consulting with older people on ways to build up financial resilience and prepare for later life. The first summit in December 2013 focused on how to help those approaching retirement build up adequate savings.
There are 1.4 million people in the UK aged 85 and over
The second summit, in February, looked at those who have recently retired. The third and final summit takes place in London on March 18.
Age UK Group Chief Executive Tom Wright said, ‘There are 1.4 million people in the UK aged 85 and over and the number is expected to double in the next twenty years.
'Yet the financial services sector is not geared up to recognise the importance of this group of people who currently account for £121 billion of spending a year.
'It's time to change that and ensure that like the rest of the population, the financial services industry treats our older people as the valuable customers that they are.'
Dr Alexander Scott, Chief Executive of the Chartered Insurance Institute and Co-Chair of the Financial Services Commission said, 'Responding to this challenge will call for some innovative solutions from the sector, including a fundamental rethink in terms of categorising and offering products and services to suit this changing market.
Financial sector needs to 'recognise importance' of older people
'Whereas now the sector views its offerings in terms of specific classes of products: current accounts, mortgages, savings, investments, and equity release; customers at this stage in life experience them in much less clearly defined ways.
'Developing this new approach is going to need a cross-cutting discussion, and so this group representing different parts of the sector is a good place to start.'
The commission will launch its findings on 25 June.