1. Financial Capability Strategy for UK Older people in retirement Presentation to the Age Action Alliance Money Matters group Rebecca Langford, Policy Manager 16 March 2015 1

2. To provide an update on the older people in retirement strand of the UK Financial Capability Strategy and discuss next steps ahead of the publication of the Strategy update on 25 th March. To hear about initiatives members are involved in that support the Strategy recommendations. To seek views on how we turn the recommendations in the draft Strategy into organisations committing to take action in the final Strategy. Financial Capability Strategy for the UK Aim of this agenda item 2

3. Financial Capability Strategy for the UK Background 3 The UK’s first financial capability Strategy was developed and published in 2006 with an intended five-year lifespan. Much work has been done to develop understanding of financial capability and what works. The Money Advice Service is currently co-ordinating and leading the development of a new Financial Capability Strategy for the UK. The Draft Strategy was published for consultation in September 2014. The Final Strategy is due for publication in September. This is not a Money Advice Service Strategy, this is the overarching strategy for the UK financial capability sector

4. Financial Capability Strategy for the UK Why is the Strategy Needed 4

5. Financial Capability Strategy for the UK Strategy Framework 5

6. 1. Support the 1 in 3 older people who find managing their day-to-day finances difficult to become more effective money managers. Ensuring budgeting tools and support are accessible for older people and improve signposting and referrals. Providing practical support and assistance to help older people to shop around and get the best deal on big purchases, utilities or other services. Helping older people to maximise their financial means. 2. Building on Age UK’s Financial Services Commission recommendations, the financial services I industry should work with the advice sector and older people’s organisations so that products and services are easy to use and accessible for older people. 3. Focus resources on the key risks to financial wellbeing in later life. Support people who reach retirement with a mortgage to develop a realistic mortgage repayment plan (that may involve debt advice). Increase the early take-up of debt advice by over-indebted retirees. Encourage people to make timely plans to manage the impact of increasing cognitive impairment on financial wellbeing.. Help people make informed and sustainable decisions about funding long-term care Financial Capability Strategy for the UK Draft Strategy Recommendations (overview) 6

7. Widespread support for the Strategy including a focus on the retired population and responses to the draft Strategy broadly agreed with the priorities laid out in the draft Strategy. Needs of people falling into the ‘Older People’ group are diverse. The final Strategy will recognise the differing needs of people within this group, including those whose circumstances may make them vulnerable. Additional priority areas for older people Increasing resilience to financial scams: Elderly people can be more vulnerable to scams and can lose larger sums than other sections of society. Tackling financial abuse: We consider that this should also be a priority area for working- age people in vulnerable situations similar to those of older people. Making a will and end-of-life planning: This is part of preparing for and managing life events for working-age people as well as older people. Financial Capability Strategy for the UK Consultation response 7

8. Shared ownership is critical Action Groups will take forward the development of recommendations and implement them. Where suitable groups already exist we will seek to capitalise on this. There will be an action group for older people. To ensure that people in vulnerable situations are not forgotten taking account of them will be formally incorporated into the Terms of Reference of action groups. Action groups will have good third sector representation. Continued work with relevant organisations to: o co-ordinate and share research so we avoid duplication o further develop the recommendations and actions related to older people for inclusion in the final Strategy Use the Strategy to involve ‘trusted messages’ who don’t necessarily provide guidance on financial matters – possibly a commitment to signpost? Financial Capability Strategy for the UK Next Steps 8

9. 9 Section title Money Advice Service Update New tool ahead of pensions reforms: Retirement Income Options (RIO) New style of interactive guide What to think about to make good decisions around income in retirement Focus on simplifying defined contributions pension pot options Actionable next steps Signposts to Pension Wise / Retirement Advisors. Also launching a retirement advisor directory and updated MAS annuity tables.

10. What activities are group members involved in to support older people to be effective money managers? What needs to happen to ensure that support is available to and reaches older people? Are the group aware of any existing targets related to improve the financial capability of older people? Who are the right messengers? Do the group have experience trying to involve others in delivering financial guidance/budgeting guidance etc. What evidence do we have about what works that we can draw on? Is there any planned research/evaluation in the pipeline? Are there evidence gaps that need to be filled? How can we avoid duplication when planning research projects? Abuse and scams – recommendations for these were not developed by the working group as they are new additions to the Strategy. What should the recommendations here cover? Financial Capability Strategy for the UK Discussion 10