• +353-1-416-8900(GMT OFFICE HOURS)
  • 1-800-526-8630(US/CAN TOLL FREE)
  • 1-917-300-0470(EST OFFICE HOURS)
Financial Services Marketing to the Retired and Elderly Product Image

Financial Services Marketing to the Retired and Elderly

  • Published: November 2003
  • Region: United Kingdom
  • Key Note Publications Ltd

This report reviews key trends and developments in the market for Financial Services for the Retired and Elderly. A Strategic Overview of this market is provided and analysis is carried out under the following market segments:

-Life Insurance
-General Insurance
-Equity Release Plans
-Annuities
-Long-Term Care Insurance
-Funeral Plans
-Wealth Management and Inheritance Tax Planning

A Pest Analysis is provided, which outline the Political, Economic, Social and Technological factors that impact this market. Company Profiles are also provided for some of the main players in this industry.

Executive Summary <BR><BR>WEALTH IN THE GREY MARKET <BR>INCREASE IN THE ELDERLY POPULATION <BR>CONCENTRATION OF THE FINANCIAL SERVICES MARKET <BR>CONSUMER TRENDS <BR>MARKETING ACTIVITY <BR>KEY ISSUES FOR THE FUTURE <BR><BR>1. Introduction <BR><BR>-SUBJECT <BR>-OBJECTIVES <BR>-METHODOLOGY <BR>-ORIGINAL RESEARCH <BR>-DEFINITION <BR><BR><BR>2. Strategic Overview <BR>-MARKET DYNAMICS AND SEGMENTATION <BR>Market Overview <BR>UK Insurance Industry <BR><BR>-DISTRIBUTION <BR>Distribution Channels <BR>Table 1: New Individual Business in the Insurance Industry by Channel of Distribution (% based on APE and £m), 1998-2003 <BR>Independent Financial Advisers <BR>Direct Sales Forces <BR>Direct Marketing <BR>Diversity and Focus <BR>'Bancassurance' and the 'one-stop shop' <BR>New Media <BR>Competitive Structure <BR>Table 2: Largest Ten General UK Insurance Groups Based on UK Premiums (£m), 2002 <BR>Table 3: Largest Ten Long-Term UK Insurance Groups Based on UK Premiums (£m), 2002 <BR><BR>-ADVERTISING <BR>Traditional Media <BR>Table 4: Main Media Advertising Expenditure on Major Products for the Over-50s (£000), Year Ending March 2002 <BR>Table 5: Main Media Advertising Expenditure on Major Products for the Over-50s (£000), Year Ending March 2003 <BR>Table 6: Top Ten Advertisers of Products for the Over-50s by Main Media Advertising Expenditure (£000), Years Ending March 2002 and March 2003 <BR>Table 7: Top Five and Top Ten Advertising Spenders as a Proportion of Total Main Media Advertising Expenditure on Products for the Over-50s (£000 and %), Years Ending March 2002 and March 2003 <BR>New Media <BR>Table 8: Response Rates to Advertising by Media Type (% of survey respondents replying), 1999 and 2001 <BR>Direct Mail <BR>Table 9: Number of Direct Mail Items Sent by Sector (million items), January to March 2002 and January to March 2003 <BR>Table 10: Consumer Response Rates to Direct Mail by Sector (%), 1998-2002† <BR><BR>-THE CONSUMER <BR><BR>Age Structure of The UK <BR>Table 11: UK Population by Age Group (million), 1961-2026 <BR>Table 12: UK Life Expectancy at 65 Years of Age† by Sex, 1983-2018 <BR>Gender <BR>Table 13: UK Population by Age and Gender (million), 2001 <BR>Houses <BR>Table 14: Composition of Households in Great Britain by Number of People and Number of Households (%, million households and number of people), 1971-2002 <BR>Table 15: Single-Person Households in England by Age of Householder (%), 1971-2021 <BR>Table 16: Households in the UK by Type of Tenure (%), 2000/2001 <BR>Spending Power <BR>Table 17: Median Individual Net Income in Great Britain by Family Type and Sex (£ per week), 2000/2001 <BR>Table 18: Median Net Income of Pensioner Units in the UK (£ per week), 1999/2000-2001/2002 <BR>Table 19: Household Savings by Household Type and Amount in Great Britain (% and 000 households), 1999/2000 <BR>Table 20: Average and Total UK Weekly Household Expenditure on Selected Goods and Services (£ and £m), 2001/2002 <BR>Table 21: Average Weekly Household Spending in the UK by Age (£), 2001/2002 <BR>The Internet and `Silver Surfers' <BR>Table 22: Percentage of UK Households with Access to the Internet, 2000-2003† <BR>Table 23: Adults in Great Britain Who Had Used the Internet in the 3 Months Prior to Interview by Sex and Age (%), 2000-2003 <BR><BR>MARKET FORECASTS <BR>Solvency Regulations <BR>Equity Release Regulations <BR>Concentration in the Life Market <BR>Risk and the Claims Culture <BR>Future of the Housing Market <BR><BR><BR>3. Life Insurance <BR>-BACKGROUND <BR>Types of Life Insurance <BR><BR>-MARKET SIZE <BR>Table 24: New Individual Life Premiums by Value and as a Proportion of Total Premiums (£000 and %), Q1 1999 to Q1 2003 <BR><BR>-CONSUMER TRENDS <BR>Table 25: Average UK Household Expenditure on Life Products (£ and %), 2000 <BR><BR>-MARKETING ACTIVITY <BR><BR>-ADVERTISING <BR><BR>-DISTRIBUTION <BR>Table 26: Sources of New Individual Life Premium Sales (%), 1999-2003 <BR>ABI Definitions <BR><BR><BR>4. General Insurance <BR>-BACKGROUND <BR><BR>-MARKET SIZE <BR>Table 27: UK General Insurance Net Written Premiums (£m), 1998-2002 <BR><BR>-CONSUMER TRENDS <BR>Table 28: Average Household Expenditure on General Insurance Products (£ per year and % of households), 2000 <BR><BR>MARKETING ACTIVITY <BR>Motor Insurance <BR>Property Insurance <BR>Private Medical Insurance <BR><BR>-ADVERTISING <BR>Motor Insurance <BR>Property Insurance <BR>Private Medical Insurance <BR><BR>-DISTRIBUTION <BR>Table 29: Source of General Business Premiums in the UK (%), 1990-2002 <BR><BR><BR>5. Equity Release Plans <BR>-BACKGROUND <BR>Types of Equity Release Plan <BR><BR>-MARKET SIZE <BR>Regulation <BR><BR>-CONSUMER TRENDS <BR>Table 30: Tenure by Age of Household Reference Person (%), 2001 <BR><BR>-MARKETING ACTIVITY <BR><BR>-ADVERTISING <BR><BR>-DISTRIBUTION <BR><BR>6. Annuities <BR>-BACKGROUND <BR>Types of Annuity <BR>Drawdown <BR>Phased Retirement <BR><BR>-MARKET SIZE <BR>Table 31: Summary of New Individual Single Premium Insurance Business (£m and %), Q2 1999-Q2 2003 <BR><BR>-CONSUMER TRENDS <BR>Consumer Concern <BR>Poorer Pensioners and Cross-Subsidisation <BR>Pension Gap <BR><BR>-MARKETING ACTIVITY <BR>Suppliers <BR>Open Market Option <BR>Product Flexibility <BR>Rates <BR>Table 32: Best Six Annuity Rates for Compulsory Purchase Annuities — Male Aged 60 (£ per annum), July 2003 <BR>Table 33: Best Six Annuity Rates for Compulsory Purchase Annuities — Female Aged 60 (£ per annum), July 2003 <BR>Table 34: Best Six Annuity Rates for Compulsory Purchase Annuities — Joint Last Survivor, Male Aged 60, Female Aged 55 (£ per annum), July 2003 <BR>Table 35: Best Six Annuity Rates for Enhanced Pension Annuities — Male Aged 60 (£ per annum), July 2003 <BR>Table 36: Best Six Annuity Rates for Enhanced Pension Annuities — Female Aged 60 (£ per annum), July 2003 <BR>The Future <BR><BR>-ADVERTISING <BR><BR>-DISTRIBUTION <BR><BR><BR>7. Long-Term Care Insurance <BR>-BACKGROUND <BR><BR>-MARKET SIZE <BR><BR>-CONSUMER TRENDS <BR><BR>-MARKETING ACTIVITY <BR><BR>-ADVERTISING <BR><BR>-DISTRIBUTION <BR><BR><BR>8. Funeral Plans <BR><BR>-BACKGROUND <BR><BR>-MARKET SIZE <BR>Providers <BR>Regulation <BR><BR>-CONSUMER TRENDS <BR><BR>-MARKETING ACTIVITY <BR><BR>-ADVERTISING <BR><BR>-DISTRIBUTION <BR><BR>9. Wealth and Inheritance Tax Planning <BR><BR>BACKGROUND <BR>Table 37: Average House Price at Sale in England and Wales by Type of Property — Detached and Semi-Detached Properties — (£ and %), January to March 1995-2003 <BR><BR>Table 38: Average House Price at Sale in England and Wales by Type of Property — Terraced Properties, Flats/Maisonettes and All Types of Housing Property — (£ and %), January to March 1995-2003 <BR><BR>-MARKET SIZE <BR><BR>-CONSUMER TRENDS <BR><BR>-MARKETING ACTIVITY <BR><BR>-ADVERTISING <BR><BR>-DISTRIBUTION <BR><BR><BR>10. An International Perspective <BR><BR>-MARKET DEVELOPMENTS <BR>Age of Consumers <BR>Table 39: Population Aged 65 and Over — EU Comparison (%), 1970, 1981, 1991 and 2001 <BR>Table 40: UK Population by Age Group (%), 1961-2026 <BR>Consolidation and Cross-Selling <BR><BR>-COMPETITOR ENVIRONMENT <BR>International Products — Worldwide <BR>International Products — EU <BR>Small Is Beautiful? <BR>Tight Regulation <BR><BR>-CONSUMER BEHAVIOUR <BR>Pensions <BR><BR><BR>11. PEST Analysis <BR><BR>-POLITICAL FACTORS <BR>Pensions <BR>Raising the Pension Age <BR>Private and State Pensions <BR>Table 41: Proportion of Pensioner Units with Income on Top of State Benefits (%), 1994/1995-2000/2001 <BR>Table 42: Proportion of Pensioner Units with Less than 50% of Income from State Benefits (%), 1994/1995-2000/2001 <BR>Europe <BR><BR>-ECONOMIC FACTORS <BR>Market Fluctuations <BR>Table 43: Key UK Economic Indicators (% and 000), 1993-2002 <BR>Regulation <BR><BR>-SOCIAL FACTORS <BR>The Rise of the 'Beanpole' Family <BR>Same-Sex Couples <BR>Women and Life Insurance <BR><BR>-TECHNOLOGICAL FACTORS <BR>Genetic Testing <BR>The Internet and Digital Television <BR><BR><BR>12. Consumer Dynamics <BR><BR>-OVERVIEW <BR>Table 44: Extract from Survey Results Showing Comparison of Agreement Levels by Age (% of respondents agreeing), 2003 <BR><BR>-UNDERSTANDING AND COMPARING DETAILS OF PRODUCTS AND SERVICES <BR>Difficulty Taking On Board Details of Products and Services <BR>Table 45: Difficulty Taking on Board Details When Considering a Financial Product or Service (% of respondents agreeing), 2003 <BR>Difficulty Comparing Products and Services <BR>Table 46: Difficulty Comparing Financial Products and Services Offered by Different Companies (% of respondents agreeing), 2003 <BR>Difficulty Knowing Important Differences Between Similar Products and Services <BR>Table 47: Difficulty Knowing Important Differences Between Similar Financial Products and Services (% of respondents agreeing), 2003 <BR><BR>-MAIN REASONS FOR CHOOSING A PRODUCT OR SERVICE <BR>Table 48: Summary of Main Reasons for Choosing Financial Products or Services by Age (% of respondents agreeing), 2003 <BR>Low Cost <BR>Table 49: Low Cost as a Main Reason for Choosing a Financial Product or Service (% of respondents agreeing), 2003 <BR>Possibility of High Returns <BR>Table 50: Possibility of High Returns as a Main Reason for Choosing a Financial Product or Service (% of respondents agreeing), 2003 <BR>Security <BR>Table 51: Security as a Main Reason for Choosing a Financial Product or Service (% of respondents agreeing), 2003 <BR><BR>-BEING INFORMED ABOUT PRODUCTS AND SERVICES <BR>Keeping Up To Date <BR>Table 52: Keeping Up To Date With Financial Products and Services Available (% of respondents agreeing), 2003 <BR>Regularly Reviewing Policies and Products <BR>Table 53: Checking at Least Once a Year That Insurance Policies and Financial Products Still Offer What is Wanted (% of respondents agreeing), 2003 <BR><BR>-DISTRIBUTION CHANNELS <BR>Table 54: Summary of Willingness to Buy Financial Products and Services Through Different Distribution Channels by Age (% of respondents agreeing), 2003 <BR>Unwillingness to Buy Products and Services Without a Face-to-Face Meeting <BR>Table 55: Unwillingness to Purchase Financial Products Without a Face-to-Face Meeting (% of respondents agreeing), 2003 <BR>Willingness to Buy Products and Services From a Supermarket or Retail Store <BR>Table 56: Willingness to Purchase Financial Products or Services from a Supermarket or Retail Store (% of respondents agreeing), 2003 <BR>Willingness To Buy Products and Services Over the Telephone <BR>Table 57: Willingness to Purchase Financial Products and Services Over the Telephone (% of respondents agreeing), 2003 <BR>Willingness to Buy Products and Services Over the Internet <BR>Table 58: Willingness to Purchase Financial Products and Services Over The Internet (% of respondents agreeing), 2003 <BR>Unwillingness to Disclose Personal Financial Information Online <BR>Table 59: Use of Internet for E-Mail and Information but Unwillingness to Disclose Personal Financial Information Online (% of respondents agreeing), 2003 <BR><BR>-SEEKING AND PAYING FOR PROFESSIONAL ADVICE <BR>Seeking Professional Advice When Making Decisions About Financial Products and Services <BR>Table 60: Professional Advice Sought When Making A Decision to Buy or Change a Financial Product or Service (% of respondents agreeing), 2003 <BR>Paying for Professional Financial Advice <BR>Table 61: Willingness to Pay for Professional Financial Advice (% of respondents agreeing), 2003 <BR><BR>-FAITH IN FINANCIAL ADVISERS AND FINANCIAL SERVICES COMPANIES <BR>Trusting Financial Advisers to Show Lack of Bias <BR>Table 62: Trusting Financial Advisers Not to be Biased (% of respondents agreeing), 2003 <BR>Confidence in the Regulation of Financial Services Companies <BR>Table 63: Confidence that Financial Services Companies are Properly Regulated (% of respondents agreeing), 2003 <BR><BR>-CHOICE OF SUPPLIER <BR>Purchasing from an Independent Broker <BR>Table 64: Preference for Purchasing Financial Products or Services from an Independent Broker (% of respondents agreeing), 2003 <BR>Purchasing Direct from the Provider <BR>Table 65: Preference for Purchasing Financial Products or Services Direct from the Provider (% of respondents agreeing), 2003 <BR><BR>-CONCERNS ABOUT INSUFFICIENT INCOME <BR>Table 66: Concerns About Having Insufficient Income in Old Age (% of respondents agreeing), 2003 <BR><BR><BR>13. Company Profiles <BR><BR>-ABBEY NATIONAL PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 67: Abbey National PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 68: Abbey National PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-ALLIANCE & LEICESTER PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 69: Alliance & Leicester PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 70: Alliance & Leicester PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-ALLIANZ CORNHILL INSURANCE PLC (ALLIANZ GROUP, GERMANY) <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 71: Allianz Cornhill Insurance PLC Financial Summary (£000, number and %), 1999-2001 <BR>Table 72: Allianz Cornhill Insurance PLC — Industry Comparison (%, number of days and £), 31st December 2001 <BR>The Future <BR><BR>-AVIVA PLC (FORMERLY CGNU PLC) <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 73: CGNU Life Assurance Ltd Financial Summary (£000, number and %), 2000-2002 <BR>Table 74: CGNU Life Assurance Ltd — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-AXA UK PLC (PART OF AXA GROUP) <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 75: AXA Insurance PLC Financial Summary (£000, number and %), 1999-2001 <BR>Table 76: AXA Insurance PLC — Industry Comparison (%, number of days and £), 31st December 2001 <BR>The Future <BR><BR>-BARCLAYS PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 77: Barclays PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 78: Barclays PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-FRIENDS PROVIDENT PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 79: Friends Provident PLC Financial Summary (£000, number and %), 2001-2002 <BR>Table 80: Friends Provident PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-GE LIFE LTD <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 81: GE Life Ltd Financial Summary (£000, number and %), 2000-2002 <BR>Table 82: GE Life Ltd — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-HBOS PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 83: Halifax PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 84: Halifax PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>Table 85: HBOS PLC Financial Summary (£000, number and %), 2001-2002 <BR>Table 86: HBOS PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-HSBC BANK PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 87: HSBC Bank PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 88: HSBC Bank PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-LEGAL & GENERAL GROUP PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 89: Legal & General Group PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 90: Legal & General Group PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-LLOYDS TSB GROUP PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 91: Lloyds TSB Group PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 92: Lloyds TSB Group PLC — Industry Comparison (%, number of days and £), 31st December 002 <BR>The Future <BR><BR>-MARKS AND SPENCER PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 93: Marks and Spencer PLC Financial Summary (£000, number and %), 2001-2003 <BR>Table 94: Marks and Spencer PLC — Industry Comparison (%, number of days and £), 29th March 2002 <BR>The Future <BR><BR>-NORTHERN ROCK PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 95: Northern Rock PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 96: Northern Rock PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>PPRUDENTIAL PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 97: Prudential PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 98: Prudential PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-ROYAL & SUN ALLIANCE INSURANCE GROUP PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 99: Royal & Sun Alliance Insurance Group PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 100: Royal and Sun Alliance Insurance Group PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-THE ROYAL BANK OF SCOTLAND GROUP PLC <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 101: The Royal Bank of Scotland Group PLC Financial Summary (£000, number and %), 2000-2002 <BR>Table 102: The Royal Bank of Scotland Group PLC — Industry Comparison (%, number of days and £), 31st December 2002 <BR>The Future <BR><BR>-SAGA GROUP LTD <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Advertising <BR>Distribution <BR>Profitability <BR>Table 103: Saga Group Ltd Financial Summary (£000, number and %), 2000-2002 <BR>Table 104: Saga PLC — Industry Comparison (%, number of days and £), 31st January 2002 <BR>The Future <BR><BR>-STANDARD LIFE ASSURANCE COMPANY <BR>Corporate Strategy <BR>Description <BR>Aims <BR>Products <BR>Distribution <BR>Profitability <BR>Table 105: Standard Life Bank Ltd Financial Summary (£000, number and %), 2000-2002 <BR>Table 106: Standard Life Bank PLC — Industry Comparison (%, number of days and £), 15th November 2002 <BR>The Future <BR><BR><BR>14. The Future <BR><BR>-DEMOGRAPHICS <BR>Table 107: Summary of Age Groups in the UK (million and %), 1961-2026 <BR>The Grey Market of the Future <BR>Profile of the 70s Moving Into 80s <BR>Profile of the 60s Moving Into 70s <BR>Profile of the 50s Moving Into 60s <BR>Profile of the 40s Moving Into 50s <BR>Economic Consequences <BR><BR>-THE ECONOMY <BR>Table 108: Key UK Forecasts for 2002-2004 <BR>Pensions and Income <BR>-THE INSURANCE INDUSTRY <BR>Solvency <BR>New Directions and Products <BR>Branches and the `Human Touch' <BR>Marketing Directions <BR>Companies to Watch <BR><BR>-EUROPE <BR><BR>15. Further Sources <BR>Associations <BR>Publications <BR>General Sources <BR>Bonnier Information Sources <BR>Government Publications <BR>Other Sources <BR>

WEALTH IN THE GREY MARKET<BR>Pensioner households are more likely to have some savings, and less likely to have no savings at all than any other type of household. Households headed by a person aged between 45 and 75 are more likely than any others to own investment products of all kinds — for example, only 25% of households headed by a person aged between 35 and 44 owned stocks and shares in 2001, compared with 34% for the 55 to 59 age bracket.<BR><BR>Pensioners also have high house owner-occupancy levels, at a time when houses have grown in value as assets — by more than 40% since the first quarter of 2000. Lone pensioner households have the highest owner-occupancy levels of all groups; although the number of such households is currently decreasing, it is projected that in the future the figure will rise, with each household needing a range of insurance products.<BR><BR>INCREASE IN THE ELDERLY POPULATION<BR>Between 1961 and 2001, the number of people in the UK aged over 65 increased by 51%. By 2011, the number is projected to be 10.3 million, which will represent 17.1% of the total population. The working-age population will grow very slowly in comparison, so the proportion of the population that is over 65 and/or retired will increase steadily into the 21st century.<BR><BR>Expectation of life at all ages is rising, such that the demand for guaranteed long-term income products is likely to increase, as is demand for financial management services to ensure efficient use of capital and sensible saving.<BR><BR>The majority of those aged over 65 are women, and women have different needs to men in the financial services market owing to longer life expectancy and lower incomes on average. They can expect lower annuity rates and higher health insurance premiums, but it remains to be seen whether the market can adapt to the increase in financially independent women earning salaries equal to their male contemporaries.<BR><BR>CONCENTRATION OF THE FINANCIAL SERVICES MARKET<BR>Recent years have seen a rapid concentration of financial services companies, such that the market is likely to be dominated by a handful of large organisations. This has given rise to an increase in 'bancassurance' and the possibility of a 'one-stop shop' for financial services. Smaller, specialist providers that do not enter into such arrangements could be forced out of the market, so that healthy competition might be a casualty of consolidation.<BR><BR>Niche markets should remain untouched by this phenomenon. Saga continues to grow as a supplier of products to the over-50s, and is unlikely to become part of a general insurance provider. At the same time, interest in insurance products tailored to the over-50s market from the providers is not increasing.<BR><BR>CONSUMER TRENDS<BR>The survey for this report found that there were significant levels of difficulty experienced by consumers in understanding and comparing financial products and services. This was more true of the pre-retirement group (aged 55 to 64) than of most others.<BR><BR>Generally, it emerged that the pre-retirement group and the over-65s have markedly different attitudes to a number of key issues in the financial products and services market. For example, pre-retirement consumers are much more likely to seek financial advice when making a decision to buy or change a financial service or product, while the over-65s were significantly less likely to do so than the sample average.<BR><BR>A major finding was that, in general, consumers are more happy to buy financial products over the Internet than over the telephone. There is, however, still resistance among consumers aged over 55 to the idea of buying without a face-to-face meeting or otherwise by non-traditional means.<BR><BR>MARKETING ACTIVITY<BR>Three areas of the market have seen significant product development since our 2000 report. First, flexible annuities have been developed by Canada Life and Prudential to overcome the problems associated with traditional annuity plans, whereby the annuitant was bound to the same income level for life, and was committed to spending his or her entire pension fund at once.<BR><BR>Secondly, major providers have taken steps in the 'enhanced' and 'impaired' annuity markets, following the lead of small, specialist providers which pay higher annuity rates to people with lower life expectancy.<BR><BR>The third area of change is in the equity release market. This market is predicted to grow enormously in the next decade, now that it is coming under Financial Services Authority (FSA) regulation. This is likely to increase confidence for consumers and providers alike.<BR><BR>KEY ISSUES FOR THE FUTURE<BR>Several major issues governing the future of the market are considered in this report. These include the raising of the state retirement age and the decline of the state pension; the creation of a single European market for financial services; FSA regulation and competition; discrimination by insurance providers; and genetic testing and its use in underwriting.<BR><BR> <BR>

Note: Product cover images may vary from those shown

RELATED PRODUCTS

Our Clients

Our clients' logos