Steve Ellis (pictured) is chief executive of Legal & General Home Finance
In the financial services sector, we’ve become pretty good at labelling customers, or worse still, putting them in neatly defined silos.
Take people who have come to the end of their working career. We used to call that “retirement”. Now we call it “later life living” or “senior living”. Paradoxically, we’ve even starting calling it “the age of no retirement”. And the customers? Well, they’re “Silver Surfers”, “Seniors”, “Empty Nesters”.
There’s nothing wrong in doing so, but it can dehumanise much of the good work the retirement lending sector (and others) is doing to improve the day-to-day lives of individual customers.
At Legal & General, we’ve made a conscious decision to focus on what individual customers really need from later life lending, not just assuming they fall into pre-dispositioned pots. Customers like Jill and Jim who featured in our first ever TV advert, and whose generosity enable a beloved granddaughter onto the property ladder. Or David, whose living conditions we helped radically improve as part of our Property Rebuilding pilot scheme.
So, whilst the “Silver Spenders” research which we recently published highlighted the positive impact retirement lending has had on UK economics, this research, which we’ve called “The Good, the Bad and the Unexpected lives of UK pensioners” reveals a much more personal insight into later life living.
We surveyed 2,500 customers across our retirement division to find the funny, interesting and, frequently poignant stories behind the lives of Britain’s retirees.
We are amazed by the responses we received, which were rarely one-word answers; some stories ran onto additional hand-written pages. Not all of it was hugely surprising, but nonetheless it serves as a timely reminder that customers are individuals, all of whom experience retirement in a very different way. It was powerful enough for us to take a step back and inform the decision that we are going to change the way we operate across our lifetime mortgage business.
Bridging the empathy gap
We found that freedom and time are considered the most enjoyable aspects of retirement. Perhaps surprisingly, only 4% individuals rated ‘not working’ as a real positive. In fact – many missed working and the social networks and sense of purpose that their employment provided.
Financial worries are seen as the biggest negative aspect of retirement, followed by the reality of ageing, which tends to hit many hard. For some, retiring is the confirmation that they are ‘getting old’. There is no surprise then that poor health is cited by many as a negative aspect of retirement. Loss of partners, exhaustion through caring for other halves and loneliness all featured in the research.
And then there are the more unexpected aspects. Nearly a quarter of retirees are surprised at how quickly time flies throughout the day, wondering how they ever had time to work. New hobbies, caring for grandchildren and volunteering fill their schedule. One adventurous respondent even told us he was now planning to fulfil a boyhood dream of travelling to Antarctica.
Attention to the ‘little things’
These findings show how the needs, opportunities and concerns of customers vary from case-to-case. It’s with that in mind that we’re exploring a number of initiatives to meet the needs of customers as they move through later life.
There are little things that can have a big impact, such as offering bereavement and health counselling services. Then there are also wider initiatives like working with the Royal Voluntary Service to help address loneliness through home visits. There are even ways to apply technology in innovative ways. For example, we’re partnering with a technology provider to detect signs of stress in the voices of customers over the phone. We’ve even removed all the typical call centre style objectives – call duration, call abandonment rate etc – from all our call handlers.
Ultimate retirement flexibility
Finally, if one thing came through from the survey loud and clear, it was the theme of feeling out of control; certain events – related to health and loss in particular – often arose without warning, leaving our customers feeling as if they had lost control over their lives.
These insights have greatly informed the way we think about our product development. It’s clear that the emphasis needs to be on facilitating the ultimate retirement flexibility at all phases. Whether they are borrowing, repaying, spending, taking a lump sum or drawing income, customers want choice and control – and the choice needs to be readily available to encompass the endless different journeys customers are on and the stories they have to tell.
Clumping together groups of disparate customers and asking clever actuaries to create complex products isn’t going to work. After all, a lot can change in a month – health, loss, finances. We have a responsibility to look after customers for a lifetime.