Old Issues

The median age of a financial services consumer in the UK is 44 years of age, seven years higher than the median age of the broader population.

New CoreData Research reveals, for example, those over the age of 60 only account for 20.9% of the total population, but 27.4% of the financial services consumer population.

This is because in the study, which looks at consumer behavior towards the retail banking and financial services industry in Britain, those under the age of 18 are excluded from the analysis.

Although some of this demographic will have basic current accounts etc. it is deemed their exclusion makes the extrapolated component of the research more robust.

UK financial consumer distribution by age

However, regardless of the skew in the above figures that may have been created due to young people being excluded there is no denying that populations are ageing.

This is going to have significant implications for the financial services industry in terms of the types of products and services that will be required to service this growing segment – particularly when income is the key need of people in this demographic collective.

All this is set against a back drop of markets around the world much less able to offer reasonable income levels without excessive risk than had been the case in past decades.

Gone are the days when conservative/reasonable yield paying assets, supplemented by some modest exposure to more risky assets such as equities, are enough to meet income needs.

This is proving harder and harder as many low risk assets offer little to no returns, while inflation clips at the heels of the underlying assets investors already hold.

Quite a dilemma. But let’s consider what is happening demographically around the world.

The best and most common analogy is China.

Today there are 178 million Chinese over the age of 60; by 2015 this figure is expected to swell past 200 million, which will be the equivalent of a population the size of Australia’s becoming a nation of pensioners in merely three years.

This shift is happening, largely on a smaller scale, in almost every other country around the world as birth rates plateau while people continue to live longer.

In Britain it will be a case of the haves and have nots in retirement.

According to UK’s Office of National Statistics (ONS) numbers and extrapolated against CoreData Research figures – there are some 6.55 million households in Britain with no financial wealth at all.

A sobering figure if people are going to be living longer and longer with every passing year.