/ Money

Is there value for money in over-50s financial products?

money confusion

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?

Comments
Member

What this Convo is really about is whether “Parkie ” will make me take up his offer of a “free ” ball point pen in exchange for no return on my investment (well not personally ) , an ever decreasing value of the product, non-refundable, fixed amount , becoming lower the older you get . It is aimed UN-shamefacedly at males , although one or two ads have the occasional female. It reminds me of what Elvis did when he didnt like a TV advert/programme -he took out his ,45 and shot up the screen . I dont care how “beloved ” of the nation he is this advert make me want to put my hands round his throat and –squeeze-squeeze- squeeze ! Ever since the media came out with –old people have money , backed up by the Governments -rip-off “equity release ” , -aka – spending your hard earned savings on BB holidays and other profitable items for shareholders , while leaving you with little to live on in old age as the government has cut-back benefits so maybe dying earlier to save the government money . I would like to say it leaves me “cold ” (well I would be when dead ) but all it does is make me hot and angry.

Member

The covert message in these schemes is that people over fifty can easily get something that they wouldn’t otherwise qualify for without undergoing a process – like a medical examination, or having to answer lots of questions, or fill in difficult forms. It only takes a moment’s thought to realise that a company prepared to take on any old risk with no questions asked will need to load the premiums pretty heavily in order to protect against high or early claims. But there are people who know they cannot get insurance cover on normal terms so these sort of policies appeal to them and might give them comfort or peace of mind for which the supposedly inferior terms are an acceptable ‘price’ to pay – the purely mercenary approach is not appropriate in their case. I think, before castigating such schemes as bad deals, we need to bear in mind that there are different markets based on different needs. The most important thing for people contemplating a specialist over-50 plan is to do some research and take advice. It used to be possible to read objective and sensible articles about these policies in the weekend newspapers but too much of the content nowadays is ‘advertorial’ or sponsored by one of the providers so not unbiased. And, in the words of the noted adage, “if something looks to good to be true, it probably is”. Always count to ten before signing on the dotted line.

Member
Bishbut says:
20 September 2016

No matter what you are going to buy a short time spent looking on the Internet or elsewhere can save you a lot of money .more money than sense some people!

Member

Just ask yourself , “are they doing this for my benefit or theirs?” And as the answer is never my benefit, you’ve got the answer to is there any value in over-50s products.

Member

I will second that William, a good philosophical viewpoint.

Member

As I said previously, these products might not be right for all of us but can be of benefit to some.

Member
brendon hume says:
20 September 2016

Williams point is very very true as I found out on quotes for car and holiday insurance from saga!

Member

I certainly agree you have to tread carefully when dealing with companies that trade on the grey pound and Saga is not consistently favourable. But I have found their home insurance provides good cover at a competitive price. As always, with any financial product, keep your eyes wide open and think through all the angles before entering into a commitment.

Member

I’ve an email today from Saga Investment Services Ltd: “Are you ready to invest but unsure if you’re making the right choices to suit you? Why not take a look at the latest article written by our Head of Consumer Affairs, Gareth Shaw? ” (ex Which? Money). The article gives investment advice for if “I want to put some money I’ve inherited into some funds”. At no point does it mention seeking the advice of an Independent Financial Adviser.

Member

Not only that, Malcolm, but there is the leading suggestion that the best destination for an inheritance is to put the money into some funds [Saga’s presumably]. That could be sensible, but it will depend on all manner of circumstances and the best way to assess that is with the benefit of professional, and preferably independent, advice. The amount in question has a bearing on it; the bigger the windfall the more important it is to look around much more widely and consider various options. The first thing for an adviser to establish, and stick to, is the investor’s true attitude to risk; the more risk averse they are, the less adventurous should be the recommendations. Too many people have come a cropper financially because they went for [or were led into] funds with over-confident yield projections and found they couldn’t turn them back into cash when they needed to without making a loss or realising disappointing gains.

Member

Indeed John: “Our free seminars give you the opportunity to meet the Saga Investment Services team and joint-venture partners, Tilney Bestinvest.”

Member

I wonder what advantage there could be from doing it through Saga – one could go directly to Tilney Bestinvest; none for the client I would guess but a useful commission for Saga.

Member
Catherine says:
21 October 2016

Has anyone out there had dealings with British Insurers for the over 50’s.Their claims seem too good to be true.