/ Money

Are products aimed at the over-50s delivering poor value?

We’ve just carried out some new research looking at five product areas for older adult finance. The results suggest these products don’t always live up to the marketing claims.

Our investigation looked at over-50s life insurance plans, equity release schemes and funeral plans, as well as specialist car/home insurance providers and savings accounts.

We found over-50s plans that offer poor value when compared to standard whole-of-life insurance. They required nearly twice the monthly premiums for the same pay-out. We found funeral plans with low benefit limits and high cancellation charges. There were also equity release schemes with interest rates that are sometimes nearly 8%, much higher than standard mortgage rates for 10-year deals at around 4%.

On insurance, we discovered that specialist car and home insurance for over-50s (from the likes of Saga, Rias, Age UK and Castle Cover) was often more costly when compared to standard insurance. For example, in our scenarios, specialist policies for over-50s cost up to £1,075 more each year than the cheapest car insurance we found. When we looked at home insurance, the difference was £364. Some age–restricted savings accounts have interest rates as low as 0.05% or 0.1%.

Marketing of older adult finance

In an effort to get your custom, some companies offer incentives, such as gifts or vouchers. Or they use well-known TV personalities in their advertising.

This is particularly the case in the over-50s plan market, where Axa Sunlife uses chat show presenter Michael Parkinson and former One Foot in the Grave actress Annette Crosbie in TV and print advertising to promote its product.

A marketing expert from Warwick University told us:

‘If there is a crowded market with many suppliers, people may choose a company based on one attribute, ie perception of knowing people like me. Over-50s specialists will stand out, even if their abilities are no different to other companies.’

We all like to feel ‘special’ or ‘wanted’, but are these companies failing to always give us the best option?

Have you had experience of using these products or providers? The best advice is to trawl the whole market, and consider all options. Is it too easy to assume that specialist companies have your best interests at heart?


Services for the over-50s are only available to people in that age group but it does not mean that they offer best value for money. I currently have motor insurance with RIAS.

“Axa Sunlife uses chat show presenter Michael Parkinson”. This is so insincere we turn the sound off until the drivel is over (not the norm for us!).

Companies use targetting of different sectors routinely to simply sell product. The over 50’s are not special in this respect. I regret I distrust marketing people – they are in the business of telling half-truths or worse to help deceive us – and I also distrust marketing academics who are in the business of developing deceitful techniques to help organisations part us from our cash. But – we choose what to spend our money on so are usually the only ones to blame.

Politicians are a prime example of this. I wonder what they will offer the over 50s in the run up to the election?

I can’t stand the way companies patronise us to lure us into products and services. I think it’s a bit rich getting a “One Foot in the Grave” star to promote life assurance! And perhaps some people are enticed by Grandad Parky on the box – it must be effective advertising [he looks so much younger]. I suppose I wouldn’t take financial advice from somebody who needed to resort to doing daytime TV adverts for a living.

Having got that off my chest, I think the marketing of financial products does play on the fears and anxieties of the older generation who perhaps have a limited chance to boost their pensions, get hold of some capital to improve their living conditions, make good previous income shortfalls, and save their relatives from financial difficulty on their death. Of course, these promotions probably go over the heads of most of the target generation as they are aimed at the better-off who have some disposable income or assets they can surrender. And sometimes the better-off seem to jump first and look later – the detestable marketing gurus know that so they believe it’s worth throwing them a sprat like an M&S voucher and then reel them in like a mackerel. It’s all actuarially-based, of course – to the company’s advantage. Further proof that pensioners are rolling in it [stand by for an explosion from Michael] comes today with news that millions of them rose at c**k crow and stamped their feet on over £1bn worth of pensioner bonds that were suddenly released into the wind. Good luck to you all – it’s a cracker. But you can see why the insurance market in all its canny guises from equity release [cash-in your asset] to funeral plans [death deposits] wants a slice of the cake and will play games to get it. Presumably the marketing attack on senior wealth will go up another gear when we are allowed to prise the lids off our pension pots and scoop out a portion for immediate use.

I hadn’t bargained for the profanity filter. Please insert “ock-“.

renniemac says:
17 January 2015

I agree with you John it is obscene these previous TV (personalities) hate that word. come on to our screens and try to part us with our hard earned cash. it makes me angry that some wee pensioner out there maybe liked the likes of Parkinson and co so foolishly trust they are being sincere. waffle!.
It’s like Ranson telling people how to get compensation, this is someone who used to name and shame the baddies in the 70s/80s, now they are assisting the baddies. there should be some sort of governance to protect people from the likes of these.
but the government isn’t going to do anything these idiots are opening the door to allow people to foolishly plunder their pensions with live today worry later ethos. they don’t care they will have your tax and vat for all the “Lamborghinis” we are going to buy.
I always laugh at these adverts, pay such and such in the first year, but what about the preceding years, how much will I pay. oh! yes and you wont get back what you put in. etc., etc. etc….. blah, blah, blah.!
the lot of them should be outlawed.
shame on them all.

It seems to me that unless these “personalies” are actually satisfied regular users of the product they promote they should be prosecuted, along with the advertising agency and the product supplier, for misrepresentation.For example M Parkinson for life insurance, G Lineker for crisps, C Vorderman for loans, M Pierre White for stock pots. The trouble is, many people no doubt see their advice as wise, and the personality perhaps as a role model. What a delusion. I’d stop short of the death penalty though.

I can’t see the government or the advertising watchdog doing anything to stop this kind of promotion. The only hope, which people have mentioned many times before on this site, is to improve people’s knowledge and understanding of financial products and their implications, especially theose with long-term consequences. Unfortunately there are relatively few affordable sources of competent and authorised financial advice. Not everyone who has been easily parted from their money is a fool – they might have been manipulated, or led into temptation.

Rather than looking at marketing of products for the over-50s is it not time we should be putting an end to misrepresentation in marketing.

The Advertising Standards Authority investigates complaints about advertising and publishes details of the rulings. What we need is for advertising to be inspected before it appears and for ASA to be much tougher than it is at present.

Saga keep quoting me the best prices for my car insurance, but unfortunately they aren’t. I like to think that most of us can see through the adverts on television and know what value for money these death bed policies offer. In this respect, I am more optomistic than most of the correspondents above. I don’t buy the stereotype of the little old lady happily giving her money away because her favourite T.V star has told her to buy an insurance policy. Our generation were- and still are – canny! It’s true that when I’ve looked at specific products for the older groups, the only advantage seems to be the fact that they offer something that is difficult to find elsewhere. The debate then, is whether to pay up or do without.

Alan Gowers says:
19 January 2015

Your article is spot on. Poor value, in fact rip off, is my experience with Saga and even Age UK on household and car insurance. Age UK have just demanded an 8.2% rise in household contents renewal premium even though there is a no claims record. On contact they were unable or unwilling to explain why the premium was being raised at a rate of at least 5 times that of current UK inflation rate .

These companies need to change their business strategy. They can do very well indeed offering value for money, honesty and transparency.

If you ever do get an answer, I guess last year’s storms and floods will have something to do with the hike in premiums.

Brian Drowley says:
19 January 2015

I find it very simple. I start from the realistic cynical view that they`re all after our money.None of these companies are charitable institutions
Starting from this premise, get the best deal at least cost!

Brian, I agree. The priorities of a commercial organisation are generally to run a long-term profitable business for the benefit of its shareholders or owners. Looking after their customers to sustain their business would, I hope, be one of the primary factors taken into account. In the real world we currently inhabit we need to be savvy about how and where we buy. I don’t think it has ever been any different.

As someone who meticulously goes through all insurance companies annually to look at my house and car insurance I can assure you the quotes from the specialist “over 50 companies” are nearly always the dearest and do not cover everything that some of the cheaper companies quote.
But I suppose some people fall for the clever advertising.

I find this whole thing patronising. Do the authors of this report really imagine that people over 50 are incapable of discernment? I won’t see 65 again, but I’m perfectly capable of sorting the wheat from the chaff when it comes to financial products. I use comparison sites for all of my insurance policies etc, and tend to switch annually. And before anyone says it, yes I do realise that many comparison sites look after their own interests before they look after mine. Nevertheless, I do think I get the best possible deal available to me by using several different comparison sites.

I think get-confused dotcom and others like them do a useful job but there are other providers who do not go on comparison sites and might have a better policy for your situation and a lower premium too.

Incidentally, I don’t think it’s the authors of this report who under-estimate the capabilities of the over-50’s. It’s the slick marketeers who first make out that such products are terribly complicated, fraught with difficulties, and that getting hold of them is a troublesome process, and then insult us with a pathetic product that does less and costs more but assures us it is tailor-made for the senile citizen and will put them and their family at ease for ever.

As it happens, a flyer for The Age UK Guaranteed Funeral Plan [I wonder who thought up that ominous title] fell into my hands when I opened a magazine the other day and I have sent off the coupon to get the information pack to see what they can do for me. The leaflet is trying to frighten us with a bar chart that says “the average cost of a [cremation] funeral in 2014 was £3,590 and is expected to rise to £4,489 by 2019” which is about a five percent a year growth rate. It locks in the price of the specified funeral [which might be fairly basic] for whenever in the future the service is required. On the face of it, it looks like a reasonable and appealing product, but what the leaflet doesn’t say, of course, is how much you would have to pay, either in one jolt or on the drip in monthly doses. So I shall discover all in due course and reveal the truth.

I wonder at the high cost of funerals. Perhaps they should be regulated by Ofded. Personally I don’t want to be cremated so will save up for a burial – assuming my surviving family don’t blow it on a big party. Actually, I thinkon reflection that’s what I’d prefer – them having a good time, me in the recycling bin.

David Hornby says:
5 March 2015

I love the idea of OfDed! I explored a few providers’ plans a short while ago and was more concerned by the virtually universal claim that prices have increased by somewhere in the range of 6-8% pa over the past 10 years or so – significantly in excess of inflation. Why? Crematorium fuel costs seemed to be the only thing outside the industry’s own control. The largest increases appear to be associated with the funeral directors’ costs themselves. Maybe a regulator would be a good idea – after all, we’re all likely to need these services one day. How about a Which? review of funeral and funeral plan costs?

As a bowler, I’m watching the current world bowls championships from Potters. I’m pleased to see that, in a bid to entice younger players into the sport, sponsorship has changed from “Co-op Funeralcare” to “Just Retirement”. That should help!

I just took a quick look at the Just Retirement website. Seems to be straightforward and not in the least patronising. I am not in the market for their services so I shall not explore the value of their schemes.

It is a concern that many people might be beguiled by the “peace of mind”, “everything’s taken care of”, message put over by these histrionic has-beens and buy a funeral plan without being fully aware of the implications. For many it might not matter but for people where an Inheritance Tax liability is likely to arise it might not be a good idea to pay for the funeral in advance; the expenses of a funeral are deductible from the value of the estate for the purposes of calculating the IHT liability but this cannot be done where a pre-paid funeral plan exists. I doubt if the purveyors of these plans point that out to their clients, or do a proper fact-find to check whether the plan is appropriate for their circumstances. There could be serious misselling here but it wouldn’t come to light because the purchaser has passed away.

That’s a very good point about IHT, John. Prospective purchasers of funeral plans deserve to be warned about this.

Websites that use cookies ask us to acknowledge that we are happy with this. Perhaps all companies should be required to provide similar warnings on their websites, adverts and publicity material, along the line of: “This company is in business to make a profit.”

I had SAGA Telephone Saver Issue 16 & it is the worst savings account I have ever had . I put £40,000 in it in April , it was supposed to have an interest rate of 0.25% (!) . I have just been notified that it would go down to 0.05% in December . I have just phoned them to close it & found I get £1 interest ! Is this really right ?

I would have expected more or less £50 on £40,000 at 0.25% p.a. for six months. There might be terms and conditions that restrict the return in the event of early closure or withdrawal. Give them a call.

M Kott says:
29 December 2017

There is no reason why Equity Release (ER) schemes are so expensive AND only provide up to 50% release of the home’s value.

The financial world has invested in zero-coupon bonds for decades (where capital and accumulated interest is repaid at maturity) – these can fund equity release from a sector with traditionally tiny risk of default. And when you look at long-term swap rates, the provider’s margin in HUGE.

Yes the salesmen have to be paid but there’s a huge market ready to buy ER loans online from a credible provider like, say, Legal & General or the Royal London.

Which can help in 2 ways: educate older members. Start a campaign to shame the providers.

Just had an email from Telegraph Financial Solutions (“Welcome to The Telegraph
The Telegraph is an award-winning, multimedia news brand that has been synonymous with quality, authority and credibility for more than 160 years.”
– a questionable claim these days) about equity release.
It says:
………………“The tax-free cash you release with a Lifetime Mortgage is yours to spend entirely as you wish. It’s simply a loan borrowed against your home. Many people choose to use the equity they release to clear any existing debts, such as an existing mortgage or credit card balance.”………………………..

I the small, lighter, print it goes on to tell me:
“¹Equity Release Council, January 2018
This is a lifetime mortgage, which may impact the value of your estate and could affect your entitlement to means tested state benefits. To understand the features and risks, ask for a personalised illustration. Think carefully before securing other debts against your home. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt……..

Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference 610205. Only if your case completes will Responsible Life Limited charge an advice fee, currently £1,295……………

Perhaps this should be used as part of the marketing text to properly inform us, in accordance with their “quality, authority and credibility”?