The Government has taken an important step forward in ensuring that financial services work for older people. It proposed an amendment to the Financial Services Act which, for the first time, gives the regulator a mandate not just to protect consumers, but also to ask whether consumers can access the products and services they need.
Age UK has been calling for the Financial Conduct Authority (FCA) to be given this ‘access mandate’. We’ve been convinced of the need for the regulator to look at access because of what we hear from older people – we see many problems caused not just by dangerous products that consumers should be protected from but also because of the lack of products and services that are really accessible to older people.
Barriers vary: it could be direct age discrimination – being told you’re ‘too old’ for a mortgage, or credit card, or insurance. Or it could be indirect, having to jump through so many hoops to find and obtain the right kind of insurance that you give up. Often the design of services mean they just don’t work for large groups of older people – for example relying on text messages for updates and removing paper statements will make it harder for many older people to manage their money well, the reduction of the branch network and poorly designed telephone and online banking systems will make it almost impossible for others to manage independently at all.
Its very difficult to exist in today’s society without access to financial services – Government and employers want to make payments into accounts and utility and other providers want to be paid by direct debit. Certain kinds of shopping, for example online, are impossible without access to some kind of payment service. Yet all this demand has yet to be matched by improvements in supply. Consumers still struggle and Government, local authorities and other bodies need to commission and pay for special services for those who can’t use mainstream banking. This is why its important that, during debate on the Bill, the Government explicitly recognised that access to financial services is crucial and that effective competition is very much about access and affordability.
Even with this amendment, the FCA won’t be able to fix all these problems alone. But Lord Newby made clear that the Government believes that the regulator does have a role in promoting access and helping the most vulnerable and as part of this it will look at whether the market is delivering the services different consumer groups need and where necessary make rules to improve the way the market functions.