Beware financial products targeted at the over-50s

Bank accounts and insurance deals for older people are not necessarily the best.

An ever-growing number of financial products targeted at the over-50s have been launched on to the market over the past couple of years. From insurance to savings plans to share-trading accounts, there are now dozens of companies with products available exclusively for older clientele. But do they actually offer any better value than the rest of the market?

Alas, the answer is often no. Such products are regularly launched by companies looking to cherry pick the most profitable customers for their books – and while some do indeed offer a better deal than might be available in the wider market, there are plenty which do not.

For example, Abbey's recent 50+ three-year fixed-rate bond pays a rate of 5.7 per cent – not bad, but well below the market-leading 6.5 per cent available on a similar product offered by Icesave (which has no age restrictions). Furthermore, Abbey's 50+ bond is identical to another three-year bond that it offers, which pays exactly the same rate. So why bother calling the same product something different – and placing age restrictions on it?

Paul Green of Saga says: "Once older people have found a savings plan they like, they tend to stick with it."

This is why the over-50s market is so valuable. While younger savers are more likely to be rate tarts – swapping their savings from account to account in search of the best rates, older savers typically prefer to keep their money in the same place for longer. Hence, it's well worth banks and building societies putting in a little extra effort to signing them up.

When it comes to insurance, the story is similar. Specialist car insurers for older people such as Saga, or specialist brokers such as Rias, will not necessarily get customers a lower rate than they would have found by spending some time shopping on confused.com, gocompare.com, or any other financial comparison site for that matter.

Janet Connor, the managing director of Rias, says that while her company cannot guarantee it will find the cheapest rates, it may well do. "Drivers over 50 have lower levels of claims, so we're able to work with insurers to find keener prices for them," she says. "We're very committed to keeping prices at the sharp end.

"It would be unfair to say that in every case customers would do better with us than an aggregator [price-comparison site], but in many cases, we'll quote a very good price."

Green adds that Saga tailors products to customers' needs, and focuses on customer service – two qualities which he says are often a priority for the over-50s.

"When it comes to buying travel insurance, it's particularly important not to just buy on price," he says. "We're happy to insure for pre-existing medical conditions, as long as we understand them. For example, if you've got a heart condition, you don't want a policy that says it won't pay out if you have a heart attack."

If your insurance needs are complex, or you're finding that you're being turned down elsewhere, specialist financial services companies for the elderly can indeed prove a lifeline. But given the growing number of specialists, it's still worth shopping around to check you're getting the best deal. As well as Saga and Rias, it's worth checking out products from Intune, the recently launched financial subsidiary of Help the Aged and Age Concern.

If your needs are more simple, and there's no reason that you would struggle to get insured, or find the right savings account elsewhere, make sure you do a full sweep of the market – including non-age restricted products – before you make your decision.

"Across the board, the over-50s products are pretty much the same as any other financial products," says Mike Naylor of the comparison site Uswitch.com. "You still need to choose very carefully, look at the terms and conditions and remember that just because you're eligible, it doesn't mean you're getting the best value."

Naylor cites the example of Alliance & Leicester's recently launched packaged current account for the over-50s. It costs £10 a month, but pays 7 per cent interest on credit up to £2,500 for the first year – and also includes worldwide travel insurance, some additional health insurance benefits, as well as a handful of other bells and whistles. Although Naylor concedes it could represent good value for some consumers, he points out that it's important customers calculate the actual value of the extras, and check that they really are saving money.

In a similar way, it's important not to be seduced by free gifts when buying financial products. The Post Office recently launched a new life-insurance product for the over-50s, offering new customers a freeview box, digital camera, or a box of wine. But if your premiums end up significantly higher than you could have got elsewhere, or you find yourself landed with a policy which is unsuitable for your needs, the value of the gift will be nothing next to how much you could lose out by.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Arts and Entertainment
Chris Martin of Coldplay performs live for fans at Enmore Theatre on June 19, 2014 in Sydney, Australia. (Photo by Mark Metcalfe/Getty Images)
music
Sport
Dave Mackay lifts the FA Cup in 1967 having skippered Spurs to victory
football
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
Arts and Entertainment
As depicted in Disney's Robin Hood, King John was cowardly, cruel, avaricious and incompetent
film
Life and Style
Travis Kalanick, the co-founder of Uber, is now worth $5.3bn
tech
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn