Financial Capability
Strategy for UK
Older people in retirement
Presentation to the Age Action Alliance Money Matters group
Rebecca Langford, Policy Manager
16 March 2015
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Financial Capability Strategy for the UK
Aim of this agenda item
• To provide an update on the older people in retirement strand of the UK
Financial Capability Strategy and discuss next steps ahead of the
publication of the Strategy update on 25th March.
• To hear about initiatives members are involved in that support the Strategy
recommendations.
• To seek views on how we turn the recommendations in the draft Strategy
into organisations committing to take action in the final Strategy.
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Financial Capability Strategy for the UK
Background
• The UK’s first financial capability Strategy was developed and
published in 2006 with an intended five-year lifespan.
• Much work has been done to develop understanding of
financial capability and what works.
This is not a
Money Advice
Service Strategy,
this is the
overarching
strategy for the
UK financial
capability sector
• The Money Advice Service is currently co-ordinating and leading
the development of a new Financial Capability Strategy for the UK.
• The Draft Strategy was published for consultation in September 2014.
• The Final Strategy is due for publication in September.
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Financial Capability Strategy for the UK
Why is the Strategy Needed
4
Financial Capability Strategy for the UK
Strategy Framework
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Financial Capability Strategy for the UK
Draft Strategy Recommendations (overview)
1. Support the 1 in 3 older people who find managing their day-to-day finances difficult to become
more effective money managers.
• Ensuring budgeting tools and support are accessible for older people and improve signposting and
referrals.
• Providing practical support and assistance to help older people to shop around and get the best deal
on big purchases, utilities or other services.
• Helping older people to maximise their financial means.
2.
Building on Age UK’s Financial Services Commission recommendations, the financial services I
industry should work with the advice sector and older people’s organisations so that products and
services are easy to use and accessible for older people.
3. Focus resources on the key risks to financial wellbeing in later life.
• Support people who reach retirement with a mortgage to develop a realistic mortgage repayment plan
(that may involve debt advice).
• Increase the early take-up of debt advice by over-indebted retirees.
• Encourage people to make timely plans to manage the impact of increasing cognitive impairment on
financial wellbeing..
• Help people make informed and sustainable decisions about funding long-term care
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Financial Capability Strategy for the UK
Consultation response
• Widespread support for the Strategy including a focus on the retired population and
responses to the draft Strategy broadly agreed with the priorities laid out in the draft
Strategy.
• Needs of people falling into the ‘Older People’ group are diverse. The final Strategy will
recognise the differing needs of people within this group, including those whose
circumstances may make them vulnerable.
Additional priority areas for older people
• Increasing resilience to financial scams: Elderly people can be more vulnerable to scams
and can lose larger sums than other sections of society.
• Tackling financial abuse: We consider that this should also be a priority area for workingage people in vulnerable situations similar to those of older people.
• Making a will and end-of-life planning: This is part of preparing for and managing life
events for working-age people as well as older people.
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Financial Capability Strategy for the UK
Next Steps
• Shared ownership is critical
• Action Groups will take forward the development of recommendations and implement them.
Where suitable groups already exist we will seek to capitalise on this. There will be an
action group for older people.
• To ensure that people in vulnerable situations are not forgotten taking account of them will
be formally incorporated into the Terms of Reference of action groups. Action groups will
have good third sector representation.
• Continued work with relevant organisations to:
o co-ordinate and share research so we avoid duplication
o further develop the recommendations and actions related to older people for inclusion in
the final Strategy
• Use the Strategy to involve ‘trusted messages’ who don’t necessarily provide guidance on
financial matters – possibly a commitment to signpost?
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Money Advice Service Update
• New tool ahead of pensions reforms: Retirement Income Options (RIO)
•
•
•
•
•
New style of interactive guide
What to think about to make good decisions around income in retirement
Focus on simplifying defined contributions pension pot options
Actionable next steps
Signposts to Pension Wise / Retirement Advisors.
Section title
• Also launching a retirement advisor directory and updated MAS annuity tables.
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Financial Capability Strategy for the UK
Discussion
• What activities are group members involved in to support older people to be effective money
managers?
• What needs to happen to ensure that support is available to and reaches older people?
• Are the group aware of any existing targets related to improve the financial capability of
older people?
• Who are the right messengers? Do the group have experience trying to involve others in
delivering financial guidance/budgeting guidance etc.
• What evidence do we have about what works that we can draw on? Is there any planned
research/evaluation in the pipeline? Are there evidence gaps that need to be filled? How
can we avoid duplication when planning research projects?
• Abuse and scams – recommendations for these were not developed by the working group
as they are new additions to the Strategy. What should the recommendations here cover?
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