New ageing population report

Findings impact retail products for consumers aged 55+

· Regulatory update,Ageing Population,Vulnerable customers,Product design

The FCA has published its report on the ageing population and financial services. This is going to be a must-read document for all retail-facing firms, and marks a new level of sophistication in how consumer needs must be factored into products and services.

The message for firms is that while there is no obligation to provide products and services to older people, the failure to consider the needs of all of consumers is leading to poor customer outcomes and potential harm to older consumers.

The impact on product and service design and delivery could be significant, and this will be particularly the case for any firms offering products and services used by consumers over 55 years old such as inheritance tax solutions and pension alternatives.

The FCA notes that the over 55s are a diverse and growing segment of the market within a changing landscape, creating an evolving challenge for firms. The report highlights a number of shared characteristics that firms need to be aware of and catering for. There is particular concern about vulnerability in the over 75 age group.

Key findings

Trends that the FCA’s have identified and addressed include:

the impact of environment, technology and access in limiting the ability of older people to engage and transact
the impact of formal and informal upper age limits in the mortgage sector in limiting older people's ability to borrow into later life
reliance on third parties, formally and informally, to make investment and financial decisions
the challenge posed by declining cognitive abilities, leading to difficulties processing, retaining and recalling information

Several of the report's findings also apply more widely, and the regulator is keen to stress that life events such as bereavement can affect people at any age. Firms must be prepared to adjust their treatment of consumers as their needs evolve, and not simply cater solely for the 'average consumer'.

Next steps

Staff involved in senior management, compliance, marketing and product design will all want to be aware of the FCA’s findings. It will be worth reading the document and understanding the FCA’s expectations.

This publication is one of a series on consumer needs, and firms should be on the lookout for the FCA's overarching 'Approach to Consumers' report, which is expected by Christmas.

In the meantime, why not come along to our Ageing Population briefing on 2 November, where one of the FCA’s leads on this project, our newest team member, Anna Seligman, will be exploring the practical impact for firms of this initiative.