CFI and HelpAge’s New Research Initiative Examines the Financial Needs of Older Persons
> Posted by Eric Zuehlke, Web and Communications Director, CFI
A few years ago, my 90-year-old grandfather moved from Japan, where he had lived his entire life, to live with my parents in Virginia. Although he was retired and living comfortably, the death of my grandmother left him without an adequate support system. With his healthy pension and public assistance from the Japanese government, mixed with the security of living with my parents, he is well cared for. I’d say he is financially included. But on a global scale, he’s one of the lucky ones. All his supports – close family, a pension, good health care, and insurance – are inadequate for many. And the need for appropriate services is growing.
The facts speak for themselves. Between 2010-2020, the population of older persons will almost double in middle-income countries and increase by 40 percent worldwide. Yet despite this growing population, the provision of financial services is woefully inadequate. One in four older people in low and middle-income countries do not have a pension, and most pensions are inadequate to meet individual needs. Not only are financial services lacking, we don’t even fully understand financial inclusion in older age. The mismatch between the scale of the need and the attention devoted to it is staggering.
Older people in most of the world rely on a variety of income streams, mostly informal, work, family support, and assets already owned. Pensions and government assistance may also help, The varied income strategies that older people employ have implications for their financial services needs, especially since their expenses may be unpredictable.
And yet, providers often discriminate against older people through automatic age limits. Older people are also especially vulnerable to fraud and abuse. Meeting the needs of older people and protecting them requires a mix of financial service providers, regulators, NGOs, and more.
October 1 marks the 24th International Day of Older Persons. This year’s theme is “Leaving No One Behind: Promoting a Society for All,” a fitting message for a new research and thought leadership initiative CFI has launched with HelpAge and MetLife Foundation. To further understand the financial needs of older persons and the path to meet them, the project will raise awareness, increase knowledge, and promote action among financial service providers, sector regulators, policymakers, consumer organizations, and international development organizations who work on aging and/or financial inclusion.
CFI and HelpAge will conduct research to better understand the income streams and expenses of older adults and the obstacles older adults face in accessing and using the financial services that could help to improve their lives. The research will focus on Latin America and will include interviews with industry leaders and older adults in Colombia to get a first-hand look at the issues.
We will be preparing an issue paper on aging and financial services with action recommendations. We hope this paper will help to launch a global conversation. To kick-start the conversation, we will hold round-tables in Colombia on November 11 with a selected Latin American audience and in New York in early 2015 with a more global audience.
The challenges associated with an aging population will only become more prominent in the years ahead. Demographic trends – slowing birth rates and rising life expectancy – are a recipe for older people to soon become the fastest growing population segment in the world. The needs of an aging population will have to be addressed sooner or later. But taking action now can mitigate against future challenges. Stay tuned for more information and findings from this project here on this blog, or sign up for our newsletter.
Figure source: CFI publication Looking Through the Demographic Window: Implications for Financial Inclusion
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