Are we meeting the needs of older customers?
In February 2016 the FCA had published a discussion paper on the ageing population, which looked specifically at the way in which financial services meet the needs of older consumers. They have gathered views from a range of stakeholders and have decided to undertake focused work in key areas to supplement work already ongoing across the FCA and provided an update in September 2016 to explain our direction of travel at this stage in the project.
The FCA stated that shifts in demography mean the traditional concepts of retirement are changing. Products and services will need to adapt to meet the needs of an ageing population. Demographic change offers a range of opportunities and challenges that both the industry and regulators need to address for the future. Good outcomes for older consumers will come only from collaborative action, and the FCA’s Ageing Population Strategy is intended to help shape and encourage change in financial markets.
The FCA are aware that some products have age limits, some of which they have outlined in more detail in their recent FCA Occasional Paper on access. They intend to look in more detail at markets that restrict access based on age, and explore whether voluntary initiatives on transparency and signposting may help consumers to understand the options are open to them at every age. They have stated that they will also consider whether they need to do more to ensure the markets for these services work well.
Older consumers have a different asset profile to the rest of the UK population, and are currently more likely than younger consumers to be asset-rich and cash-poor, which raises issues about how older consumers can make the most of their overall wealth. Building on the FCA’s Call for Inputs on mortgages, they are looking at whether there are barriers to innovation in mortgage products that might address some of these issues. They have been encouraged to see firms thinking innovatively, with the intention of better serving the needs of older people, evidenced by some recent product developments. They are, however, keen to explore whether there is more to be done to help consumers make the most of their resources for their whole retirement.