Why get­ting older means get­ting a worse deal

The Daily Telegraph - Your Money - - FRONT PAGE -

The el­derly suf­fer dis­pro­por­tion­ately from bank branch clo­sures and in­sur­ers’ use of ‘no-frills’ poli­cies, writes Sam Barker

The fi­nan­cial well-be­ing of the el­derly and vul­ner­a­ble is be­ing harmed by bank branch clo­sures, the pric­ing of travel in­sur­ance poli­cies and in­sen­si­tive staff at many or­gan­i­sa­tions, MPs have been told. In the worst cases, cus­tomers may be de­nied ac­cess to cer­tain fi­nan­cial deals.

Ex­am­ples were laid out this week be­fore the Trea­sury Se­lect Com­mit­tee, which is in­ves­ti­gat­ing how the vul­ner­a­ble can face fi­nan­cial ex­clu­sion or be forced to pay more than other cus­tomers.

Vul­ner­a­ble con­sumers in­clude the el­derly, the blind or par­tially sighted and those with men­tal health con­di­tions.

Bank branch clo­sures

The com­mit­tee heard that the clo­sure of bank branches hit all three groups. Bri­tain has lost 53pc of its bank branches since 1989, largely as a re­sult of the growth of on­line bank­ing. Fi­nan­cial firms are also in­creas­ingly mov­ing away from send­ing out pa­per doc­u­ments.

But th­ese trends are caus­ing peo­ple who pre­fer face-to-face bank­ing or who strug­gle with the in­ter­net to be left out.

Jane Vass of the char­ity Age UK told the Trea­sury Com­mit­tee that bank branches “re­tain huge im­por­tance for older peo­ple”. When they shut, pen­sion­ers who pre­fer face-to-face bank­ing ei­ther lose ac­cess al­to­gether or have to rely on oth­ers to help them, los­ing their in­de­pen­dence.

When bank branches close, it is some­times pos­si­ble to bank at a post of­fice. How­ever, this ser­vice is not avail­able to cus­tomers of all banks and is limited to ba­sic bank­ing such as pay­ing in and with­draw­ing cash.

Ms Vass said that while some el­derly peo­ple were happy to use post of­fices as a re­place­ment for bank branches, oth­ers were not.

She said: “No one really knows what’s hap­pened to the most vul­ner­a­ble peo­ple whose branches have closed. Are they us­ing the post of­fice? Does it meet their needs? There should be an­other look at the shar­ing of bank branches.”

Bank branch clo­sures are also a prob­lem for the par­tially sighted. Eleanor South­wood of the Royal Na­tional In­sti­tute of Blind Peo­ple (RNIB) said many blind peo­ple liked to use “chip and sig­na­ture” bank cards but that was not pos­si­ble in post of­fices.

Travel in­sur­ance

Travel cover can also be in­ac­ces­si­ble to the vul­ner­a­ble, MPs on the com­mit­tee heard. For ex­am­ple, many travel in­sur­ers may not in­sure you at all past the age of 65. Oth­ers charge high pre­mi­ums. If you have a pre­ex­ist­ing med­i­cal con­di­tion, get­ting travel in­sur­ance can be hard.

Many el­derly peo­ple travel with no in­sur­ance at all, ac­cord­ing to Ms Vass.

Travel in­sur­ers can also charge high prices to those with men­tal health prob­lems. As a re­sult, half of peo­ple who have had a men­tal health con­di­tion do not tell their travel in­surer, ac­cord­ing to Katie Evans of the Money and Men­tal Health Pol­icy In­sti­tute. She said some in­sur­ers used murky pro­cesses to work out their prices. “This in­dus­try is not very trans­par­ent,” she added.

One in­surer said that com­pe­ti­tion among large in­sur­ers to keep prices down had led to cus­tomers be­ing shut out. This is be­cause in­sur­ers can re­strict what poli­cies cover to re­move cost. They may re­move cover for cer­tain med­i­cal con­di­tions, for ex­am­ple.

Smaller, spe­cial­ist in­sur­ers can of­ten help but they are harder for cus­tomers to find. A spokesman for the Bri­tish In­sur­ance Bro­kers’ As­so­ci­a­tion said an ad­ver­tis­ing cam­paign to pro­mote th­ese firms would help and could be

funded from ex­ist­ing fees paid to the City watch­dog, the Fi­nan­cial Con­duct Au­thor­ity.

Mort­gages

Older home­own­ers with in­tere­stonly mort­gages are also strug­gling, ex­perts say. Many of this group are com­ing to the end of their mort­gage term but can­not re­pay the out­stand­ing loan.

Some strug­gle to get ap­proval for an­other mort­gage be­cause many firms will not lend to those aged 65 or older.

Mark Arnold of Kens­ing­ton Mort­gages, a lender, said: “Mort­gage len­ders should start of­fer­ing longterm loans to suit­able can­di­dates, pro­vided that they meet the cri­te­ria, so that peo­ple don’t need to worry about be­ing home­less in the fi­nal decades of their lives.”

Cash, cards and web­sites

Re­stricted ac­cess to phys­i­cal cash, bank cards, web­sites and apps is also a prob­lem for the vul­ner­a­ble. Ms South­wood of the RNIB said new ban­knotes had raised dots and text to help iden­tify the de­nom­i­na­tion.

But bank cards vary, with some not of­fer­ing help­ful fea­tures to the par­tially-sighted. With web­sites and apps, she said in­for­ma­tion was not al­ways pre­sented in an ac­ces­si­ble way.

In­sen­si­tive staff

In­ter­ac­tions with the staff of fi­nan­cial ser­vices firms can also shut cus­tomers out. Ms Vass said this could hap­pen with power of at­tor­ney, ar­range­ments where some­one is ap­pointed to han­dle an­other per­son’s le­gal and fi­nan­cial af­fairs.

Bank staff some­times ig­nore the el­derly per­son who has ap­pointed an “at­tor­ney” com­pletely and in­sist on speak­ing to the rep­re­sen­ta­tive even when the cir­cum­stances did not call for it. How­ever, Ms Vass said banks are im­prov­ing in this re­spect.

Staff can also cause anx­i­ety for those with men­tal health prob­lems by ask­ing them to an­swer sen­si­tive ques­tions that bring back past trauma, for ex­am­ple.

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