Financial services needs to rethink the language it uses to communicate with older people in retirement as current terms are not well understood, according to research.
Charity Age UK today (26 April) published a report, Financial Resilience in Later Life: Who is well placed to cope with life events, based on focus groups with retired older people aged 60-89 years.
The research found commonly used terminology such as ‘preparing for life events’ isn’t well understood by older people.
Alternatives such as ‘getting your house in order’ and ‘managing your affairs’ are better received and seen as more meaningful, Age UK said.
Initially, the participants in the focus groups didn’t understand what kinds of things were meant by ‘planning’ or ‘preparing’, and would comment that they simply could not do these things.
However, it would often transpire that these same people could go on to list specific actions they had taken, such as preparing paperwork, communicating end of life wishes, making a will, planning their funeral, making decisions related to housing and other assets.
They just weren’t recognising these actions as constituting a ‘plan’, or ‘preparing for life events’, the charity said.
With a quarter of all UK pensioner households have no savings at all, according to data published in March by the Department for Work and Pensions (DWP), Age UK is calling for interventions from the financial sector in order to help older people to be more financially resilient in later life.
The charity argued that “a balance between what is reasonable and what is impossible to plan for during retirement” is needed.
During the research, older people spoke about facing multiple uncertainties, personally in terms of their own longevity and health, and externally in terms of political and economic changes, Age UK said.
A vision of something that is financially possible and positive is specially needed for social care costs, the charity warned.
According to Caroline Abrahams, charity director at Age UK, “it’s often perceived that most older people are well off”.
She said: “But this is certainly not the case for a quarter of all pensioner households that have no savings at all.
“These older people are living from week to week, reliant upon their state pension to fund life, with no money for unforeseen payments and navigating a complex financial world. The anxieties this must bring must be immense.”
According to Andy Briscoe, chair of the Financial Capability Board and the Money Advice Service, "too many older people reach retirement without a plan for how they will be able to live well in their later years, and this can come with very real costs to their quality of life".
He said: "We all need to do more to address this challenge, and this report makes an important contribution to understanding how we must to adapt and improve our approach to talking to older people about financial capability and resilience."