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Later Life Ambitions - Submission to Treasury Select Commitee - Consumers Access to Financial Services






Treasury Select Committee

Consumers’ Access to Financial Services Inquiry

Submission from Later Life Ambitions




1.     Later Life Ambitions brings together the collective voices of over 250,000 pensioners through three organisations – the National Federation of Occupational Pensioners, the Civil Service Pensioners’ Alliance, and the National Association of Retired Police Officers.


1.1 Later Life Ambitions is concerned that, increasingly, many older people are being excluded from accessing financial services. This has been exacerbated in recent years by the closures of banks and post offices, the move towards more online based banking services, poor transport in rural areas, and problems with physical health, which prevent older people from being able to travel easily or use online systems. 


1.2 We believe that the financial services sector has a duty to protect vulnerable clients. Individual businesses should have a comprehensive vulnerable client policy and procedure in place, which. sets out a company’s approach to supporting vulnerable clients to access the services that they require.  As well as a company-specific strategy, we believe that the government should take a role in encouraging and driving best practice within the financial services sector as regards to vulnerable clients. We would support for example the establishment of a sector wide code, stipulating minimum standards that individual businesses and firms should adhere to.


1.3 While we recognise that vulnerability takes many forms, our response focuses on the experience of older people in accessing financial services.


How should financial service providers define ‘vulnerability’?


2.     Vulnerability is a multifaceted concept. It arises from many circumstances. A single definition is limited and unable to capture the range of factors that can cause a person to be ‘vulnerable’ at any one stage in their life.


2.1 From interactions with our members Later Life Ambitions has identified key factors that define vulnerability. This list is not intended to be exhaustive but should be used to form the basis of businesses assessments of their customers’ needs.


2.2 Factors that cause ‘vulnerability’:

·       Age

·       Employment status

·       Poor physical health, mental health or disability

·       Whether the individual is in care or a care leaver

·       A lack of support from others

·       Income level of the individual

·       An unsuitable living environment

·       Literacy and numeracy levels


2.3 It is important that financial service providers have a comprehensive vulnerable clients’ policy and procedure in place. This should set out their approach to dealing with vulnerable clients. Older people find it particularly challenging accessing support digitally. Financial service providers should offer free telephone and face-to-face meetings to communicate with them. More personal communication ensures older people understand the services they are using and makes them feel more comfortable and secure.


2.4 Whether someone is ‘vulnerable’ should be identified as early as possible and a business must ensure that the person is treated with sensitivity. It must be understood and adhered to by staff and should be reviewed and updated where necessary.


Are certain groups of consumers excluded from obtaining a basic level of service from financial services providers?


3.     Older people are some of the most vulnerable in society. They often exhibit many of the key factors associated with vulnerability and are the most reliant on support from others. Failing to consider their needs excludes them from accessing financial services.


3.1 The effect of digital exclusion is a particular concern to our members. Financial services must be designed to be more accessible for vulnerable older people. Financial services providers are increasingly making more services digital and offers exclusively available online.


3.2 It is common for providers to offer cheaper and more flexible deals online. This unfairly impacts many older people. Later Life Ambitions members have told us that they are unable to keep up with the pace of technological change. With little or no experience of using digital services they are unable to use new digital products or access some offers. 


3.3 Research by charity, Go ON UK, has shown that 50% of the digitally excluded belong to the over-65 age group - preferring to manage their accounts and pay their bills using more traditional methods.[1] Additional research from has found that those aged over-65s are the most likely to auto-renew their car insurance without searching online for a better deal.


3.4 The closure of bank branches also negatively impacts the elderly. According to the Campaign for Community Banking Service (CCBS), about 1,500 communities have already been left without a bank on their high street. They also predict a further decline in the number of high street bank branches across the UK.[2] Staff at bank branches are also able to identify possible financial abuse and fraud. For example, if a vulnerable person is seeking to withdraw a large sum of money or is exhibiting signs of cognitive impairment.[3]


3.5 LINK has also revealed that approximately 250 ATMs are closing per month.[4] Vulnerable people - particularly those on lower incomes and older people are likely to be most significant effected by any reductions in access to cash. The less well-off you are and the older you are, the more likely you are to rely on cash transactions, with just over a quarter of older people not using card payments at all.


3.6 Additionally, the Post Office Card Account continues to play an important role for people of all ages to have easy access to their pension, benefits or tax credits. Whilst LLA supports advances and improvements in technology, we remain aware that it is not appropriate or possible for some individuals to open or manage a bank, building society or credit union account. Ending the Post Office Card Account risks affecting the most vulnerable in society, which is why we believe it should be extended beyond the 2021 deadline at which it is currently due to end.


3.7 The impact of bank branch and ATM closures is worst in isolated rural areas where there are poor local transport links. This makes it even harder for older people living in these areas to access banking services, especially if they are not comfortable with the online services. Rural areas also tend to have poorer and unreliable internet connections,[5] which contributes to further financial exclusion of older people. In person interaction at bank branches is also significant to many older people. Keeping bank branches open helps older people who experience loneliness.


3.8 In some cases, there are age related issues that prevent older people from getting online or travelling greater distances to their local banking branch. Changing needs associated with ageing mean there are some physical impairments that make it harder. In some cases, worsening eyesight means older people are unable to use digital devices. For others, mobility issues make it difficult for them to travel to their nearest bank.


3.9 Many experience the factors that cause ‘vulnerability’, but older people often face these challenges most acutely. It is key that financial services providers have a process for identifying and supporting older people who are vulnerable. Failing to do so means they are denied the ability to effectively manage their finances.