personal finance

Silver surfers finally master the financial wave


Lockdown has worked in mysterious ways for many individuals — not least a swath of older people who found themselves engaging with technology in ways they would never previously have countenanced — in order to shop, bank, socialise and see family.

Pat Hackett, 75, is a prime example. Before the pandemic she “did a bit of email”, but that was about as far as it went, she says. Lockdown lassitude led her and her partner Stephen Walsh to Zoom-based exercise classes run by Inspired Villages, the retirement community where they live, and then to a busy online diary of quizzes, wine-tasting classes and social get-togethers. 

“We also had to learn how to do all the grocery shopping online, as well as buying clothes and shoes,” Hackett adds. “I never used to do online banking either, but we do it all now — booking holidays, using comparison sites, the lot.” 

Walsh believes that when a semblance of normality returns, they will go back to shopping “in the aisles”; but, he adds, “there are many other things we’ll never go back to. Online is just so much more convenient.” 

Walsh and Hackett’s experience is part of a broad embrace of the internet — born of necessity. Figures from Age UK, a charity, reveal that younger retirees in England are widely adopting digital technology, with almost 90 per cent of 50-64 year olds and three quarters of 65-74-year-olds categorised as “everyday” internet users. 

More than 40 per cent of those two cohorts say they use the internet more now than prior to the pandemic: recent usage has centred on email, online shopping, management of finances and video calls to family and friends.

It’s a rather less rosy picture among those over 75. Under half (46 per cent) are everyday internet users, and only 24 per cent report increased usage since lockdown. Tellingly, that increase is driven mainly by existing users going online more often, rather than by digital newcomers. 

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Furthermore, more than 40 per cent of over-75s still do not use the internet at all — “busting the myth that as a result of this health emergency ‘everyone’ is now online”, as Age UK observes. 

But even the 75-plus age group has been catching up. The Office for National Statistics this month reports that the proportion of internet users aged 75 plus has grown far faster than any other age group in recent years, almost doubling over the seven years to March 2020. That’s to be expected over time, as younger, more technologically comfortable retirees move into that cohort. 

Online basics 

The internet for older people during lockdown has been very much about the basics — capacity to shop, manage finances, and meet friends and family online. But those willing and able to get to grips with the technology are also in a position to access a host of superior financial services deals unavailable to phone-based customers. 

Sarah Coles, personal finance analyst at Hargreaves Lansdown, points out, for example, that “the best online savings accounts pay up to 10 times the interest of the best on the high street. On an easy access account with £20,000 this can mean £373 more interest over five years (based on rates of 0.4 per cent online and 0.03 per cent in high street banks). 

Similarly, many insurance companies offer preferential online premiums. Direct Line, for instance, gives a 35 per cent discount for home insurance policies bought online and 25 per cent off travel insurance. Insurance, utility and phone bills can be further reduced online by simplified “shopping around” through comparison sites that round up quotes from dozens of providers. 

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Investors who use online platforms will typically pay less to trade stocks online than by phone. For instance, Interactive Investor charges a flat £49 premium per deal for phone-based trades, as well as the standard online dealing fee of £7.99, and customers must have an email address to open and operate an account. “We can make allowances to open accounts for customers with vulnerabilities over the phone, but this is not a standard process,” says Interactive Investor. 

Hargreaves Lansdown reports huge growth in older clients trading online: 90 per cent of those aged 75-plus now trade through the website or app, up from about half 10 years ago — though of course that still leaves 10 per cent who don’t, despite much higher fees for transactions by phone. 

Clearly, offline existence is both restrictive and relatively costly. As Caroline Abrahams, charity director at Age UK, observes: “While it’s true that increasing numbers of older people in the UK are online, there are still almost 2m over-75s [about a third of the total] who are offline and risk being excluded from an increasingly digital world.”

What’s stopping them? Stephen Walsh believes fear of the unknown is the biggest issue. “People say ‘I don’t do that’, and just shut it out. At the start of lockdown, some people here were terrified of online — it can be overwhelming when you’re new to it. So the main thing is to get over the fear factor.” 

Support in setting up technology, “little and often” internet classes (formal or informal) and plentiful written notes can all help in that respect. The only way forward with the internet, as with any scary-looking tool, is to become familiar with it.

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Jamie Bunce, chief executive of Inspired Villages, which runs 10 retirement complexes in England, suggests web entrepreneurs and designers also need to change their perspective. “For individuals over 65, it’s not often as simple as picking up a device and inherently understanding how to navigate technology like their younger counterparts,” he points out. 

“The problem is not that older people are simply ‘out of touch’ with technology — a stereotype which still persists — but rather that inclusivity is not always a consideration in the early construction of websites, apps or digital services.”

That could take various forms, for example by including older people in focus groups for new apps, services or products. Thomas Kamber, executive director of Older Adults Technology Services in the US, believes fewer than 2 per cent of financial online products are currently user-tested with people over 60. 

For Simon Rabin, founder of savings app Chip, whose oldest user is 93, the onus is on product creators to make internet applications such as fintech accessible to everyone. “I believe that more has to be done to change the notion that fintech is for millennials, and to allow people of all ages, including older users, to benefit from everything it has to offer,” he says. “Externally, we need to shift the conversation around it, and internally, we need to account for all user needs — from the features we build, to design and user experience.”



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