Which? recently carried out some new research looking at financial products and product options aimed at the over-50s. But once again our research results suggest these products might not be your best bet.
This won’t be news to many of you, but to try to tempt you in some companies will use incentives. These may be gifts, vouchers or maybe even well-known TV personalities in their advertising. Some of you will recall that Michael Parkinson was for a long time used by Axa Sunlife in TV and print advertising to promote its over-50s life insurance product.
And these incentives seem to work on some people, as a marketing expert from Warwick University previously told us:
‘If there is a crowded market with many suppliers, people may choose a company based on one attribute, i.e. perception of knowing people like me. Over-50s specialists will stand out, even if their abilities are no different to other companies.’
So you might be wondering, what’s really on offer for over-50s and is it really worth it?
Special deals for over-50s
Well, there are still a few age-restricted savings accounts, but our research found that these should generally be avoided. The optimistically named Danske Bank Midas Gold account pays a paltry 0.05% to 50+ savers, as does the West Bromwich Building Society’s Oak account for the over-60s.
If you’re looking for life insurance and you’re aged 50 or over, opting for an over-50s plan could mean that you’ll end up paying more in premiums than you’ll ever receive. The longer you live, the more you pay, while the amount you get in a pay-out remains the same.
Fixed pay-outs for over-50s plans also vary sharply between the different providers. For a 60-year-old paying £50 a month, the lowest pay-outs are £11,500 from LV= and Standard Life, while Rias (£13,425) and Shepherds Friendly (£13,325) are far more generous.
And paying for private medical insurance (PMI) yourself can also be expensive. We gathered PMI rates for couples aged 55, 60, 65 and 70 for both smokers and non-smokers. For a couple of non-smokers aged 55, we found that annual premiums ranged from £1,663 with Vitality Health to £2,850 with Axa. At 70, the Axa policy will set you back £5,383 each year, or £5,646 if you’re both smokers.
Do you feel special?
It would seem that some age-specialist insurers seem to have forgotten Oscar Wilde’s wise words:
‘When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is.’
So when you’re choosing insurance and savings products, look at all the deals – generalist companies included. You may want to also consider starting a separate pot of savings contributions as an alternative to paying into life or private medical insurance policies.
What do you think about over-50s specialist products and providers? Have you found any worthwhile products, or do you think they’re a waste of time?