Mutuals are ageing well

The UK is an ageing society and with that comes a growing recognition of the needs and aspirations of older people.

There are more people over the age of forty five than under, more people over sixty five than under sixteen. That means changes to the way that business operates, says Mark Beasely, from the Mature Marketing Association, who presented to cooperative retailers in the UK last month. 

The concept of age, he reports, is almost entirely associated with negative attributes in marketing and yet that is not a good reflection of how it feels to be older. Ninety five percent of marketing, he reports, is focused on people under fifty. 

But that doesn’t mean it makes sense to talk to older people as older people. Age is not how people want to be defined.

The social economy sector has some outstanding examples of people working to redefine age – such as Change Agents – including in sectors such as health and social care, where services based on co-operation and mutuality rather than financial return make all the difference. One of the best exemplars I have seen of action is what building societies are quietly doing to meet the financial service needs of older people.

“Already one in four people borrowing beyond the age of 65 is a first time buyer” says Dick Jenkins, Chair of the Building Societies Association. “The assertion that the over 40s can’t get a mortgage following the changes to mortgage regulation is overstated, but there are challenges.”

Building societies are therefore stepping back from simple age policies, beyond which you can’t borrow. They are working with insurers to help older people get cover for the mortgage risks they face. They are making sure that older customers have good information and advice in terms of their consumer rights.

The Vernon Building Society for example has lent to a married couple, both aged 70, who were renting in Poole, having moved back to the country from Spain. They had some capital and the Vernon lent them £80,000 on an interest-only basis, paid from their pensions (at a lower costs than their rental outgoings) and repayable from the sale of the property on death or if they move into alternative accommodation. They pay a discounted rate for registering a Lasting Power of Attorney to mitigate against the risk of not being able to deal with their affairs. It meant an end to our sleepless nights, the couple remarked.

Another approach is ‘right sizing’ where people move to a smaller house. Although 32% of older people have considered this in recent years, only 7% have done it, according to Legal and General. Having a trusted product designed for their need from a building society could help make a difference – even if we also as a society need to build more homes designed to be suitable for older people.

The origins of the term ‘mortgage’ is of course the grip of death (the words death and debt being similarly intertwined). Because it is a long-term product, building societies like the Vernon are taking on the stigmas of old age – while keeping an astute commercial eye for a growing market. Death may come to all, but as a society and economy, we should do better for all the years of life before it. 

Think of ageing? Think of life and not death.

 

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