Research and analysis

Consumer vulnerability in later life: challenges and solutions

Updated 13 November 2018

On 24 September 2018, the Competition and Markets Authority (CMA) hosted a roundtable discussion with Age UK on consumer vulnerability in later life.

The roundtable focused on the challenges experienced by vulnerable consumers in later life and the potential solutions to these challenges.

The roundtable comprised presentations from the CMA, Age UK, the Research Institute for Disabled Consumers (RiDC) and plenary discussions.

Representatives of Government departments, regulators, consumer groups, charities, and business representative organisations attended. The roundtable was held under Chatham House rules.

The remainder of this summary sets out key points from the presentations and some of the issues raised by attendees during plenary discussions.

Understanding the challenges

Speaker Presentations

The CMA introduced the roundtable outlining its overall programme of work on consumer vulnerability and recent relevant projects, including care homes, funerals and its energy market investigation. It also highlighted recent work undertaken by other UK regulators with implications for older people.

Age UK provided insight on the links between ageing and vulnerability. It highlighted that older people face the same challenges and have the same strengths as consumers of all ages. Age UK suggested that vulnerability arises from the interaction of personal characteristics, life circumstances and wider environmental factors (such as firm behaviour and market interactions).

Key markets for older people include regulated essential services (such as energy, financial services, telecoms and water) and later life relevant services (such as care homes, assistive products, funerals and retirement home products). Older people face a range of challenges when navigating markets, including those arising from sensory impairment, disability and cognitive impairment. Further challenges are also posed when older people experience multiple health conditions, bereavement and isolation. Digital exclusion and limited digital capabilities are also factors in vulnerability and can constrain the ability of older people to engage. Age UK noted that people 65+ are more likely to pay a higher price for the same service in key markets (e.g. energy and insurance) and noted recent research that had been undertaken on loyalty penalties across markets.

Age UK also presented findings from research on cognitive ageing, highlighting the range of different thinking skills involved. A particular policy challenge relates to recognising and responding to normal cognitive ageing - where older people have substantial knowledge but are not as quick as younger people to work things out, for example – and greater degrees of age-related decline. People with normal cognitive ageing may be slower at processing information but are perfectly able. However, there is marked variation in how well or poorly thinking skills age. The level of help and support older people require will therefore vary in practice and depend on which thinking skills have been affected through the cognitive ageing process, and to what extent they have been affected.

Plenary discussion

Participants raised the following issues when discussing the challenges facing vulnerable consumers in later life.

• There is a need for caution in using age as an indicator of vulnerability characteristic as being older does not necessarily make you vulnerable.

• Whilst there is a lack of homogeneity amongst older people, age still offers a useful practical lens of analysis, especially as some issues can become more prevalent with age.

• The retreat of public sector services (such as social services) has impacted older people, with gaps in support only being partially filled by the charity sector. This changing landscape has also led to a greater onus being placed on older people to purchase assistive products.

• The growing marketisation of services has posed challenges for older people as it is difficult to adapt to developments during older age. More markets and greater levels of choice combined with increased product complexity is likely to result in disengagement and defaulting into what is familiar. Older people are less likely to shop around and more likely to pay the RRP for products.

• In some markets, such as energy and telecoms, it may have never occurred to older people to switch supplier to get a better price or deal, particularly if they didn’t think there was an issue or didn’t feel they needed to do so.

• Given the lack of homogeneity amongst older people, there should not be a one size that fits all approach to digital inclusion. It is a mistake to push everybody in a digital direction, particularly as there are risks associated with encouraging certain cognitive ageing groups with impaired judgement to go online as they may be overconfident and more vulnerable to mistakes.

• Research has shown that older people tend to be more concerned and mistrusting about how their data is used. When online, older people are less likely to keep software up to date, with implications including missing out on services and possible product obsolescence.

Developing Solutions

Speaker Presentations

The CMA provided an overview of its approach to developing consumer remedies and its ‘remedies universe’ (the range of interventions available for making markets work well for consumers), reflecting on the themes of technology, distressed purchases and engagement with markets.

The Research Institute for Disabled Consumers highlighted its work in user-centred research. It involves disabled and older consumers in the design of products and services, including drawing on a UK wide consumer panel. It has tended to undertake user-centre research in either regulated markets or with companies committed to corporate social responsibility.

Plenary Discussion

During the plenary discussion the following points were raised:

• Inclusive design is important as by designing products and services with older people in mind you are more likely to include everybody, in contrast to designing for the young with the risk of excluding older people.

• Technology creates new opportunities for helping/enabling older consumers, particularly when coupled with use of trusted intermediaries.

• The role of technology in helping identify vulnerability is still a work in progress and there remain limits – for instance while automatic switching services have potential to open up better deals they may miss certain nuances/circumstances for older people which mean a certain deal wouldn’t work for them (e.g. having to read own energy meter).

• Regulators and businesses are increasingly using technology to improve services, drawing on customer data to link up priority services schemes for vulnerable consumers.

• Water and energy companies are currently piloting data sharing approaches with the pilot delivering an increase in the uptake of services.

• Older people find other work arounds to solve vulnerability challenges – for instance, if housebound they may draw on support networks (family members, friends other third parties) – giving ATM cards to someone who can help, although such approaches can also pose risks.

Organisations which attended the roundtable

• Money and Mental Health Policy Institute
• Scope
• Dementia UK
• Carers Trust
• Ombudsman Services
• Citizens Advice
• Which?
• Ofgem
• Ofcom
• Ofwat
• UKRN (UK Regulators Network)
• FCA
• BEIS
• We are just
• ABI (Association of British Insurers)
• Behavioural Insights Team
• Centre for Policy on Ageing
• Consumer Council for Water
• DCMS
• Energy UK
• Fair by Design
• Financial Ombudsman Service
• The Finance Foundation
• The Money Carer Foundation
• National Audit Office
• Payment Systems Regulator
• Phone-paid Services Authority
• Sustainability First
• Financial Services Consumer Panel
• UK Finance
• Water UK